Definition
Iceberg Order
An iceberg order is a large order that reveals only a small visible portion at a time, automatically refreshing the displayed quantity as it fills, to hide the true size from the market.
Implemented on Indian exchanges via the disclosed quantity feature, an iceberg shows only a slice in the order book; once that fills, the next slice surfaces, until the full hidden order is executed. This conceals the trader's real size and limits front-running.
The iceberg is a simple, exchange-native way to reduce market impact for a large order without a full execution algorithm. Each visible refresh loses price-time priority, going to the back of the queue, which is the cost of hiding size, so traders balance stealth against fill speed.
Related terms
- 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.
- 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.
- Slicing (Order)Slicing is the breaking of a large parent order into many smaller child orders released over time, the core technique by which execution algorithms reduce market impact and conceal size.
- Price-Time PriorityPrice-time priority is the rule by which an exchange's matching engine ranks orders: better-priced orders execute first, and among orders at the same price, the one entered earliest takes precedence.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.