A Market if Touched (MIT) is an order to buy (or sell) an instrument below (or above) the market. Its purpose is to take advantage of sudden or unexpected changes in share or other prices and provides investors with a trigger price to set an order in motion. Investors may be waiting for excessive strength (or weakness) to cease, which might be represented by a specific price point. MIT orders can be used to determine whether or not to enter the market once a specific price level has been achieved. This order is held in the system until the trigger price is touched, and is then submitted as a market order. An MIT order is similar to a stop order, except that an MIT sell order is placed above the current market price, and a stop sell order is placed below.
IB may simulate market orders on exchanges. For details on market order handling using simulated orders, click here.
The Reference Table to the upper right provides a general summary of the order type characteristics. The checked features are applicable in some combination, but do not necessarily work in conjunction with all other checked features. For example, if Options and Stocks, US and Non-US, and Smart and Directed are all checked, it does not follow that all US and Non-US Smart and direct-routed stocks support the order type. It may be the case that only Smart-routed US Stocks, direct-routed Non-US stocks and Smart-routed US Options are supported.
XYZ has a market price of $16.61. You decide to buy 100 shares, but you don't want to enter the market until/unless the price drops to $16.58. Create a BUY order, and select MIT in the Type field to specify a market if touched order (MIT). In the Trigger Price field, enter the trigger price of $16.58. Transmit the order, which will be held in the system until the trigger price is touched, and will then be submitted as a market order.
You've transmitted your market if touched order. The order will be held in the system until your trigger price of 16.58 is touched, and will then be submitted as a market order.
The market price of XYZ begins to fall and touches 16.58, which is your trigger price. A market order to buy 100 shares at 16.58 is submitted and filled.