As the Market Crashed in 1987, Paul Tudor Jones Made $100 Million in a Single Day: ‘The Most Important Rule of Trading Is to Play Great Defense, Not Great Offense’

It doesn't take a genius to make money in a bull market. But if you want to come out on top during a crash, you've really got to know your stuff. That's what separates casual investors and newbies from the Wall Street legends.

Think about it: Michael Burry won betting against the housing bubble before the global meltdown of 2008. Warren Buffet built his huge fortune buying when everybody else was selling. Then, there's hedge fund billionaire Paul Tudor Jones.

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He might not be a household name, but Jones offers a textbook lesson in how a wise investor profits off market panic. On October 19, 1987, the Dow Jones Industrial Average suffered its biggest single-day drop in history. It was so bad that anybody who can still remember that day calls it "Black Monday."

Billions of dollars worth of wealth evaporated into thin air, and some traders lost everything over the course of just a few hours. But after the dust all settled, it turned out Paul Tudor Jones hadn't lost a dime. In fact, he'd made $100 million in a single day by betting against the collapsing market.

"The most important rule of trading is to play great defense," Jones has always argued. "Not great offense."