When a stock market crashes, how does money just disappear? I looked it up online (here), but I find it hard to believe that money literally "disappears".  For example, if I buy 10 stocks of a toaster company for \$100 per share, and then the stock value drops to \$10, I've lost \$900, but the entities I bought from have gained \$900 collectively.  I understand that money is supposed to be an abstract concept, but we should be able to trace where the dollars go. 

So how does money just disappear when the stock market crashes?
Stocks are not money.

The valuation of a company - the market captialisation - is the number of shares multiplied by the share price.

The share price is the price people are willing to trade at right now. It does NOT mean all the shares have been traded at that price.

If a company issues 1 million shares, at a starting price of £10, the market cap is £10 million. They may only sell a few of these shares, so much less than £10 million actually changes hands. If the price rises to £20, only a few of the shares changed hands at that price - but the market cap is reflected in all the shares, and is now £20 million. People have commented on the flaws in this methodology.

The same happens in a crash. Only a fraction of the shares actually change hands, but the media report on the change in the market cap.

If you want an analogy, consider a house burning down. You buy the house for £200,000. Then it sadly burns down (and without insurance). It is now worth £0. However, no money has been created or destroyed; it's a loss of value of an asset.