Schwab doesn't track the frequency or volume of stop loss orders, said spokesman Neil Shapiro. Fidelity also couldn't provide data, said spokesman Stephen Austin.

Stop losses may work in markets that are slowly declining because orders may get filled relatively close to their trigger prices, said Schwab's Frederick.

Parsons, the MannKind investor, said he presumed his stop losses were in place for normal trading. More should be done to protect investors from extreme price drops and rebounds within minutes as a result of electronic trading, he said.

'Something Going On'

"I really think that there's something going on that the average investor is going to get more concerned about," he said of volatility in the stock market.

Nasdaq spokesman Wayne Lee declined to comment in an e-mail as to whether the exchange is currently investigating irregularities in MannKind's trading. Exchanges, working with the SEC, have created a number of safeguards for investors since the May 6 crash, including harmonizing rules for canceling trades and pausing trading if a stock moves 10% or more in a 5-minute period, said Ray Pellecchia, a spokesman for NYSE Euronext in a telephone interview.


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