Iceberg Order

An iceberg order (also called a reserve order or hidden order) is a large limit order where only a fraction of the total size is displayed on the public DOM at any time. When the visible portion fills, the next tranche is automatically revealed: until the full order is complete.

Example: A 500-lot sell iceberg at 5,250.00 might show only 25 lots on the DOM. When those 25 fill, another 25 appear. Buyers see a constant 25-lot offer but do not know that 450+ contracts remain hidden behind it.

Why traders use iceberg orders

Minimize market impact: if a 500-lot order appeared in full on the DOM, aggressive buyers would immediately recognize the supply and either avoid the level or expect resistance. The iceberg prevents this by hiding the full intent.

Avoid front-running: showing the full order allows other algorithmic participants to trade ahead of it. By hiding size, the institution protects its execution price.

Maintain anonymity: institutional participants prefer not to reveal their positioning to competitors.

How to spot an iceberg on the tape

Iceberg orders leave a telltale signature in Time and Sales:

• The same price level prints repeatedly with consistent size (e.g. 25 lots, 25 lots, 25 lots…)
• Each print is the same round number (the visible tranche size)
• Total volume at that level accumulates far beyond what the DOM suggested

On the DOM, an iceberg appears as a limit order that seems to “refresh”: you see it get hit, but it immediately reappears at the same level with the same size.

Iceberg and absorption

When an iceberg order is absorbing aggressive flow (e.g. a large hidden buy absorbing selling), it produces the absorption signature: sell aggression in T&S, heavy bid-side prints, but price failing to drop. The iceberg is taking every sell order without letting price fall.

Recognizing this pattern: consistent small fills at the same level, price not moving despite aggression: is a valuable edge in identifying where large participants are positioned.