What is an iceberg order?
In one line: An iceberg order is a large order split into small visible pieces. Only the tip shows in the order book; each time it fills, another piece appears.
The short answer
An iceberg is mostly underwater. You only see the tip.
An iceberg order works the same way. A trader wants to buy or sell a lot, but shows only a small amount at a time. When that piece fills, the next piece appears at the same price.
It's also called a reserve order or a display-quantity order.
A simple example
A fund wants to buy 50,000 shares at $30.00. It places an iceberg order showing 500 at a time.
- The book shows a bid of 500 shares at $30.00.
- Sellers sell 500 to it. That piece is filled.
- Another 500 instantly appears at $30.00.
- This repeats 100 times, until all 50,000 are bought.
To anyone watching Market depth, it looks like a small order that won't go away.
Why traders use them
Showing a 50,000-share buy order would tip off the whole market. Sellers might raise their prices, or other buyers might jump in front.
Hiding the size helps the trader get filled closer to their price. It's one of the ways an Institutional investor moves big money quietly, along with Dark pools and algorithms.
Many exchanges and brokers offer them, including on futures and stock markets. Some retail brokers let you use them too.
How it can show up on a chart
When a big hidden buyer sits at one price, price may keep bouncing off that price while lots of Volume trades there. A level holds again and again, more than its visible orders would explain.
You often can't prove an iceberg is there. You see the effect: a floor that keeps absorbing selling. Some Footprint chart and Order flow tools try to flag them.
A common mistake
Assuming the iceberg will hold forever. Even a big hidden order has an end. When it's fully filled, or cancelled, the floor can disappear fast.
So treat it like any other level: a reason to watch, not a promise. If you trade near it, put a Stop loss on the far side and size from that distance with the position size calculator.
Questions
How do you detect an iceberg order?
Look for a price where much more trades than the order book ever shows, while the same small order keeps reappearing. You can suspect it, rarely confirm it.
Are iceberg orders legal?
Yes. They're a normal order type offered by many exchanges.
Can retail traders place iceberg orders?
Some brokers allow it, usually on stocks or futures. Check your broker's order types.
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