umber of parameters can trigger or could have triggered stock markets crashes, such as:Many people believe that overprice stock could or can be the one of the main causes. The crash brings the share prices back to normal level (The 1929 stock market crash, 2000).Also, A number of people believe that massive fraud and illegal activities might be the main villain of stock crashes. But things proved that very little actual insider trading and illegal activities could cause the crash (The 1929 stock market crash, 2000). Whenever the reserve bank tightened the Monetary policies and let out to lower the stock prices since it perceived that speculation lead stocks to be overprice causing damage to the economy (The 1987 stock market crash, 2000). Now you might think that Shah 4what is Monetary Policies. Although, Monetary policy is a central bank's actions to influence the availability and cost of money and credit, as means of helping to promote national economic goals.But, Many economists believe that the use of Computer trading (programmed trading) by large investing corporations might be the one cause. In programmed trading, computers are programmed to automatically order large stock trades when certain market prevailed (The 1987 stock market crash, 2000).And, Numbers of analysts agree that Overprice stock can trigger crash and can damage economy (The 1929 stock market crash, 2000).One belief is that large trade and budget deficits might lead investors into thinking that those could cause a fall of stocks (The 1987 stock market crash, 2000).And Buying on margin, many people figured out that the buying on margin can or could be the villain. The investors buy stocks on a small percentage of investments and loan other part of investments from the banks. If the stock prices fall down, investor could not repay its loan back to banks, so the stockbrokers sell those stocks at random prices. But, if the stock prices go up, the investors gain the pr...
