Wall Street Crash

Speculation

many speculators were peasants & farmers without disposable income looking to get rich quick after the war
- they traded on credit/‘on the margin’, buying stocks and shares without having the full financial means to do so
speculators drove stocks up to artificially high levels → people traded based on expectation of profit rather than how a company was actually doing
speculation is both a behaviour and an activity
caused a bank run as well, because so many people were withdrawing money to buy stocks

10% of all American households participated in the stock market by the end of 1920
4 million shares were traded every day on average
12.8 million shares were sold on Black Thursday
- created panic selling → loss of market confidence → crash of stock market → Wall Street Crash
- a reflection of a complete wipeout of the market