What Is an Iceberg Order?
The term ‘iceberg’ comes from the idea that an iceberg typically has only a portion of its entirety visible and that there might be much more hidden; the ‘tip of the iceberg’ is all it shows.
Iceberg orders spread out large orders into small-sized limit orders. The small-sized orders are split into visible and hidden parts. This usually automated process allows for concealing the initially intended order quantity.
Iceberg orders are typically used by prominent players like institutional investors. They use this type of order to conceal their true intentions and not tip off the market about their goals.