A Limit if Touched is an order to buy (or sell) an instrument at a specified price or better, below (or above) the market. This order is held in the system until the trigger price is touched. An LIT order is similar to a stop limit order, except that an LIT sell order is placed above the current market price and a stop limit sell order is placed below.
Using a Limit if Touched order helps to ensure that, if the order does execute, the order will not execute at a price less favorable than the limit price.
To place a Limit If Touched order in Classic TWS:
- Use the Customize Layout followed by Order Columns feature to display the Aux. Price column
- Click the Bid price to create a Sell order; click the Ask price to create a Buy order;
- Select LIT as the order type; the name of the Aux. Price field changes to Trigger Price
- Enter the price at which you want the order to be executed in the Limit Price filed
- Enter a Trigger Price in the Trigger Price field
- Select the appropriate time in force
- Hit Transmit (or T) to submit the order
Find out more on the Limit If Touched orders page of the IBKR website.