What is an iceberg order?
- Author
- CRYPTO PORT Editorial
- Published
- Updated
- Reading time
- 4 min
In short
An iceberg order shows only a slice of a large quantity on the book, replenishing it each time the visible part fills. It is used to limit the visible footprint of a big order, but the full size takes time to work through and the price can move away meanwhile.
Key points
- Only a slice of the total size is visible
- Each filled slice is replenished automatically
- Reduces the order's visible footprint on the book
- Working through the full size takes time
Definition
An order type that displays only a preset slice of its total quantity on the book, topping the slice back up from the hidden remainder each time it fills.
Enter a total of 100 BTC with a 5 BTC display size and only 5 BTC appears on the book. When that slice fills, the next 5 BTC is posted from the hidden remainder, and so on until the total is worked. On screen it looks like a series of small orders.
A large order shown in full changes how other participants behave, and that can move the price against the person who placed it. Limiting the displayed size is an attempt to soften that effect — hence the name, with only the tip visible above the water.
It does not hide anything perfectly. A slice that keeps reappearing at the same price and size is observable, and book history can reveal the pattern. Most implementations also send each refill to the back of the queue, so the market can move away before the full size is done.
Watch out for
- · Each refill usually goes to the back of the queue, so the full size may never be filled
- · Not every exchange supports it, and the semantics are not standardised
- · Repeated replenishment can still reveal the order's presence