Following a truly amazing $400m snafu at the beginning of yesterday’s trading session, Knight Capital shares are down over 50% in today’s session. As of its most recent filings, Knight’s capital base is $1.5B on $8B in assets. The good news is that Knight is significantly less levered than MF Global, which had $45B in assets on a similar capital base. The bad news is that for any size broker dealer, a loss of confidence can create its own demise. While I’m not going to handicap a bankruptcy for Knight, trouble for large levered entities and forced liquidations can have significant effects on the broader market. Luckily, KCG’s $8B balance sheet is relatively small compared to some of these other events. Below is a chart of the S&P 500 with a few of these instances pointed out.