During the incident, the Dow Jones Industrial average dropped about 6%, and lost more than $1 trillion dollars in mere minutes.

Fortunately, stocks rebounded relatively fast after the shock, but we wanted to know, what does it take to crash a stock market?

Well, there have been countless financial "crashes" throughout history.

They even go back to the 1600s when modern stock exchanges were first evolving among the trade economies of Europe.

A crash represents a steep, sudden decline in the value of market prices, and they can often lead to an economic depression.

The most devastating crashes are usually the result of an overly-inflated market, also known as a "bubble".

Investment bubbles occur when prices of market shares are driven upwards past their real value.

According to some market theorists, a bubble is encouraged by a "herd mentality" ,

where people first jump on the bandwagon of a profitable stock, and then, when the bubble bursts, they engage in panic-selling.

The most famous example of this was during the 1929 American Stock Market Crash.

Before then, post World War I America experienced an economic boom,

optimism in the economy inspired many take on risky loans, and invest in stocks.

But when the economy slowed down people began to sell their shares - at first slowly, and then in droves.

Market prices went into freefall, and there were no fail-safe rules to stop the inevitable crash.

Stock markets can also be "spooked" into a decline or a crash following catastrophic events.

For example, San Francisco’s massive 1906 earthquake is thought to have played an integral role in the financial panic of 1907.

During that time, the market sank to about 50% of the previous year’s valuation.

Additionally, In 2001, after the September 11th terrorist attacks, the stock markets were closed for almost a week.

In the first five days back, the markets faced a loss of about $1.4 trillion dollars.

The digital era has also introduced new threats to the stock market in the form of "high frequency trading".

HFT is when thousands of trades are carried out by computers in fractions of a second.

The swiftness of computer programs at buying and selling puts traditional traders at a disadvantage.

Also, the use of HFT creates a lot of potential volatility in the stock market.

Computer programs that are designed to automatically respond to price points can trigger mass selling before anyone can notice.

This contributed to the 2010 Flash Crash, after a large enough downtick in stocks caused many HFT programs to further withdraw, leading to a drastic crash.

After that particular event, government regulators imposed new laws, called "circuit breakers",

that temporarily "pause" trading if a stock falls 10% or more within a 5-min period.

These safeguards give traders breathing room to reexamine their options instead of panicking and selling everything before the stock bottoms out.

The Securities and Exchange Commission works hard to regulate the wild swings of the stock market.

But for the modern era, stock markets remain more volatile, and susceptible to crashes than anyone might ever think.

Investing is a pretty risky thing to do, but sometimes big risks can have even bigger rewards.

To learn why Africa is such a hotspot for foreign investment right now, check out our video here.

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