Iceberg Order — A Large Order Hidden Like an Iceberg
What happens if you put a million shares on the order book all at once? Everyone is startled and the price moves against you. That is why an order that hides its size like an iceberg came to be.
Definition of an iceberg order
An iceberg order splits a large order into several small pieces, exposing only the 'visible piece (peak)' on the order book while keeping the rest of the size hidden. It is also called a reserve order.
Just as the name suggests, like an iceberg, only a small tip shows above the surface while the large mass stays hidden underwater.
When the visible piece is filled, the system automatically pulls a new piece from the hidden size and puts it back into the quotes.
Why hide it — reducing market impact
Revealing a large order all at once causes problems.
For example, if an institution puts a full sell order of a million shares onto the order book, other participants who see that size will lower the price in advance, so it ends up selling on unfavorable terms. This kind of loss is called market impact cost.
An iceberg order hides the actual size to reduce this impact. That is why it is used mainly by institutional investors who handle large volumes.
Limits and things to know
An iceberg order is not all-purpose either.
· Hiding it does not make it completely invisible. Some participants notice 'there is hidden size' by seeing the pattern of new size being continuously replenished at the same price. · Support and rules differ by market and exchange. · The practical benefit this order gives an individual investor is small. An individual's trade size is usually not large enough to worry about market impact.
When looking at the order book, this concept helps you understand that 'the size on screen may not be everything.'
The iceberg order is a concept used mainly in institutional large-block trading. This article does not recommend any particular trading technique, and takes as its learning point that the displayed size in the order book may not show all of actual supply and demand.
常见问题
Q. Are an iceberg order and a reserved (scheduled) order the same thing?
They differ. A scheduled order is a convenience feature that 'automatically submits an order at a preset time,' while an iceberg (reserve) order is an institutional order method that 'exposes only part of a large order and hides the rest.'
Q. Do individual investors need iceberg orders too?
Generally not. Few individuals handle a size large enough to worry about market impact. That said, it is useful to know the fact that the displayed remaining size in the order book may not be everything.
相关页面
📋 结果基于历史数据计算,过去的收益不代表未来的收益。
📋 本服务旨在帮助理解投资、供教育之用,并非投资建议。