It is short for snap to midpoint order; an order in which the original order price is set based on the current bid-ask spread plus or minus an offset (in this particular aspect, it bears resemblance to a pegged order). However, as the price moves, the pegging mechanism is halted. This order allows investors/ traders to submit an order for execution within the boundaries of the spread using the midpoint of the bid-ask price as a reference point.
The order is created by entering an offset amount which for determination of the active limit price, as per the following formula:
Sell order price = midpoint of the bid/ask price + offset amount
Buy order price = midpoint of the bid/ask price – offset amount
