Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail
Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail

Market If Touched (MIT)

What it is:

Market if touched (MIT) is an order that will be executed only if a security reaches (touches) a specific price.

How it works (Example):

Investors place an MIT order with a broker if they wish to delay buying or selling a security until its price becomes more advantageous. An MIT buy order instructs a broker to execute the trade once the security's market price has fallen to a desired price. Likewise, an MIT sell order instructs a broker to execute the trade once the market price has risen to a desired price.

For example, suppose Bob would like to purchase 100 shares of stock ABC, but only after the stock price reaches $25 per share. Bob places an MIT order with a broker for these 100 shares. Once stock ABC reaches $25 per share, the broker executes Bob's order.

Why it Matters:

MIT orders allow investors to arrange trades without having to continually monitor a security's market price. It is important not to confuse MIT orders (sell orders, specifically) with stop orders, which instruct brokers to sell a security at a certain point before it sustains further losses in value.

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