Definition
Disclosed Quantity (Iceberg Order)
Disclosed quantity, the basis of an iceberg order, shows only a portion of a large order to the market at a time, hiding the full size to reduce market impact and information leakage.
On Indian exchanges, a trader placing a large order can specify a disclosed quantity so that only a slice is visible in the order book; as each visible portion fills, the next is released automatically. This iceberg behaviour prevents the market from seeing the full size and front-running it.
Disclosed-quantity orders must meet a minimum disclosed proportion set by the exchange. They are a simple, exchange-native tool for working a large order discreetly, complementing more sophisticated execution algorithms that achieve the same goal of minimising market impact through dynamic slicing.
Related terms
- Execution AlgorithmAn execution algorithm is a program that works a large parent order into many smaller child orders over time to minimise market impact and achieve a target benchmark such as VWAP or the arrival price.
- Market ImpactMarket impact is the adverse price movement caused by the act of trading itself, where a large buy pushes the price up and a large sell pushes it down as the order consumes available liquidity.
- Day OrderA day order is valid only for the trading session in which it is placed; if it is not executed by the close, it is automatically cancelled and does not carry over to the next day.
- Limit OrderA limit order specifies the maximum price a buyer will pay or the minimum a seller will accept, executing only at that price or better and resting in the order book until it can be filled.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.