Limit if Touched Orders
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.
Notes:
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.
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Example
Order Type In Depth - Limit if Touched Buy Order
Step 1 – Enter a Limit if Touched Buy Order
XYZ has a market price of $16.45. You decide to buy 100 shares, but you don't want to pay more than $16.35 and you don't want to enter the market until the price drops to $16.40. Create a BUY order, and select LIT in the Type field to specify a limit if touched order. In the Lmt Price field, enter a limit price of $16.35, and in the Trigger Price field, enter the trigger price of $16.40. Transmit the order, which will be held in the system until the trigger price is touched, and will then be submitted as a limit order. It will only execute at $16.35 or better.
Step 2 – Order Transmitted
You've transmitted your limit if touched order. The order will be held in the system until your trigger price of 16.40 is touched, and will then be submitted as a limit order. It will only execute at $16.35 or better.
| Assumptions | |
|---|---|
| Action | BUY |
| Qty | 100 |
| Order Type | LIT |
| Market Price | 16.45 |
| Limit Price | 16.35 |
| Trigger Price | 16.40 |
Step 3 – Market Price Falls, Limit Order Submitted
The market price of XYZ begins to fall and touches 16.40, which is your trigger price. A limit order to buy 100 shares at 16.35 is submitted.
| Assumptions | |
|---|---|
| Action | BUY |
| Qty | 100 |
| Order Type | LIT |
| Market Price | 16.40 |
| Limit Price | 16.35 |
| Trigger Price | 16.40 |
Step 4 – Market Price Falls, Limit Order Executes
The price of XYZ shares continues to fall until it touches your limit price of 16.35. The order for 100 shares is filled at 16.35 per share.
| Assumptions | |
|---|---|
| Action | BUY |
| Qty | 100 |
| Order Type | LIT |
| Market Price | 16.35 |
| Limit Price | 16.35 |
| Trigger Price | 16.40 |
Order Type In Depth - Limit if Touched Sell Order
Step 1 – Enter a Limit if Touched Sell Order
You're long 100 shares of XYZ with an average price of 64.94 and a current market price of $68.39. You decide to sell your 100 shares, but you want to make a profit of no less than 350.00. You create a SELL order, and select LIT in the Type field to specify a limit if touched order. In the Lmt Price field, enter a limit price of $68.44, and in the Trigger Price field, enter the trigger price of $68.42. Transmit the order, which will be held in the system until the trigger price is touched, and will then be submitted as a limit order. It will only execute at $68.44 or better.
Step 2 – Order Transmitted
You've transmitted your limit if touched sell order. The order will be work as a live order until your trigger price of 68.42 is touched, and will then be submitted as a limit order. It will only execute at $68.44 or better.
| Assumptions | |
|---|---|
| Action | SELL |
| Qty | 100 |
| Order Type | LIT |
| Average Price | 64.94 |
| Market Price | 68.39 |
| Limit Price | 68.44 |
| Trigger Price | 68.42 |
Step 3 – Market Price Rises, Limit Order Submitted
The market price of XYZ begins to rise and touches 68.42, which is your trigger price. A limit order to sell 100 shares at 68.44 is submitted.
| Assumptions | |
|---|---|
| Action | SELL |
| Qty | 100 |
| Order Type | LIT |
| Average Price | 64.94 |
| Market Price | 68.42 |
| Limit Price | 68.44 |
| Trigger Price | 68.42 |
Step 4 – Market Price Rises, Limit Order Executes
The price of XYZ shares continues to rise until it touches your limit price of 68.44. The order for 100 shares is filled at 68.44 per share and you make a profit of $350.00.
| Assumptions | |
|---|---|
| Action | SELL |
| Qty | 100 |
| Order Type | LIT |
| Average Price | 64.94 |
| Market Price | 68.44 |
| Limit Price | 68.44 |
| Trigger Price | 68.42 |
Disclosure
Any stock or option symbols displayed are for illustrative purposes only and are not intended to portray a recommendation.
