What is MIT actually doing?

[knurled]

I've been trying to figure this out and haven't seen it discussed in the Help files or here, so please forgive me if I'm missing something.

I understand what MIT is and the basics of how exchanges work and what the different order types are.

When an NT8 user has an MIT profit trigger active, but the price hasn't been touched yet, do they have an active limit order at the exchange? Or is the whole thing done synthetically?

In other words, there appears to be two ways one could make MIT work. You could have a limit order standing at your target so if prices blow through you get filled then and there, but then have either the platform software or the brokerage's software kill the limit order and fire a market order if prices touch then reverse. I can see that this way, there could be upside against latency sometimes, but other times latency would result in both the limit order filling and the market order also filling, resulting effectively in a position reversal you didn't want.

The other way to do it is have no standing take profit order and do it all in software, hence no risk of double orders.

What way does NT use? If it all depends on the brokerage and exchange in question, is there a way to tell? If I was in a situation where I wanted to use MIT but also had some latency concerns about my internet connection, is there a way to tell in advance whether the market order is getting fired from my computer or from the brokerage?

[NinjaTrader_Kate]

Hello knurled,

Thank you for your post.

MIT orders are characterized as “synthetic” orders meaning they are typically not supported by exchanges. Because MIT orders are not supported at the exchange, the orders are not recorded on the exchange order books until the trigger price is met and a normal market order is submitted.

In essence, MIT orders are “hidden” from the market and managed locally

Due to the synthetic nature of MIT orders, it’s important to understand how they are managed by NinjaTrader. Once an MIT order is submitted, the order will be categorized in either the “Trigger Pending” or “Accepted” state.

• Trigger Pending: When in a Trigger Pending state, the MIT order is locally held by NinjaTrader. At this stage, it is imperative that NinjaTrader remain connected to the data feed to allow the platform to monitor the price of the market. Once the user defined price level is achieved, NinjaTrader will submit the market order.
• Accepted: If the MIT order is in the Accepted state, this indicates the order is working on the connection technology servers and NinjaTrader can be disconnected from the data feed without risk of deactivating the order.

Please let us know if we may be of further assistance to you.

[knurled]

Do I basically understand right that some brokers will always put the order in Accepted state, thus eliminating any connectivity or lag issues on the local machine once it's in to the broker?

[NinjaTrader_Kate]

Hello knurled,

Thank you for your reply.

If the broker supports server side MIT orders, yes, the order would be in an Accepted state right away. You'd want to check with your broker whether this is available - most brokers do not have native support for MIT.

Please let us know if we may be of further assistance to you.