What is Market If Touched (MIT)?
Market if touched (MIT) is an order that will be executed only if a security reaches (touches) a specific price.
How Does Market If Touched (MIT) Work?
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 Does Market If Touched (MIT) Matter?
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.