As I write in my recent book about Black Monday, what made that decline so different was not just its scale and speed. In hindsight, it clearly was the first modern market crash, reflecting significant and lasting changes in how Wall Street works—changes that, even after they intensified and did damage again in 2008, regulators still puzzlingly have yet to fully address.

Before 1987, crashes typically were confined to specific markets—the stock market, the gold market, the bond market, or the commodity markets. On Black Monday, the turmoil hit everywhere at once: in the futures trading pits and options markets in Chicago, on Treasury trading desks in New York, in the gold trading pits in New York, as well as on every stock exchange in the country. The panic spread around the world, leaving the Hong Kong market shuttered for a week and causing record-setting declines in other financial capitals. The speed with which the crisis bypassed the traditional financial safeguards exposed a balkanized regulatory system that struggled to respond in a coherent, coordinated way.

The 1987 crash was also the first market crisis to involve widespread use of financial derivatives—specifically, futures contracts and options contracts that tracked various stock-market indexes. The first of these novel derivatives was introduced in 1982. By mid-1983, they were being used by nearly a dozen giant pension funds, almost half of the 300 largest banks doing business in the United States, and a host of giant insurance companies, according to an authorized history of the Chicago Mercantile Exchange by the journalist Bob Tamarkin. The cross-market strategies used by these big investors linked the futures, options, and stock markets together in ways that were unforeseen and unprecedented.

There were different types of investors in 1987, too. While pension funds and other giant institutional investors had long populated the bond and mortgage markets, they were relative newcomers to the stock market. When they first started to shift assets into stocks in the 1970s, they did so with astonishing speed and on an enormous scale. In a 2000 book on the impact of pension funds on the stock market, the longtime Pensions & Investments editor Michael Clowes noted that the size of these funds’ stake in the stock market grew by nearly 20 percent each year between 1974 and 1980. And that was before a robust bull market arrived during August 1982, attracting even more institutional cash. The potential consequences of this extraordinary migration of titan-sized investors into the stock market was poorly studied and poorly understood in the years before Black Monday.

The 1987 crash was also the first meltdown to be vastly accelerated by a growing reliance on computers to deliver orders to the market and move cash around from market to market. The New York Stock Exchange had automated parts of the process of handling customer orders, but its systems were overwhelmed by all the orders delivered during the panic by the computers hooked up to Wall Street trading desks. The automated Federal Reserve system that banks relied on to transfer cash was disabled for hours at a time by the sheer volume of business on Black Monday.