Iceberg order is a concept that refers to the completion of trades by dividing the total order amount into small parts in large volume trades.

In trading, users use the Iceberg order method to hide the actual order size. Trading is likened to an iceberg. On the visible side of the iceberg, there are certain small trades, but on the invisible side, there are more extensive and larger trades.

For partially visible orders, the entire part of the order that is requested to be seen on the platforms takes its place on the platform, taking into account the price and time priority, as a new order entered at the moment it is revealed. The Iceberg Order process continues until the order is fully filled, expires or is canceled. The visible part of the Iceberg Order must cover at least 20 percent of the total order amount.

What Are the Disadvantages of Iceberg Order?

The most obvious disadvantage of the Iceberg Order is that it can take longer to execute and the trader has to pay higher trading fees. However, for those who want to buy or sell a large number of cryptocurrencies without moving the market, Iceberg Order could be the right option.

What Are the Advantages of ıceberg Order?

Here are some advantages of using Iceberg Order:

• An Iceberg Order allows large investors to buy and sell a large number of shares without creating a price movement effect on the market, and thus they can hide their true intentions from the market.
• The Iceberg Order can help investors get a better price for their shares.
• The Iceberg Order can be used to trade assets that cannot be easily traded on the open market.
• An Iceberg Order can reduce the risk that buyings will be filled at an unfavorable price.

Why Is Iceberg Order Used?

Iceberg order is used by institutional traders who want to buy and sell large amounts of trading instruments. The Iceberg Order uses orders that only appear in a small part of the order book. This way, the size of large orders is hidden and trades can be executed without attracting attention in the market.

For instance, when a large investor wants to sell a stock, instead of placing one large sell order, he or she may use smaller limit sell orders. This way, he or she hides the selling pressure and avoids placing a large sell order that could cause panic.

Similarly, when a large investor wants to buy a stock at the lowest possible price, they can use smaller orders instead of placing a large buy order. This prevents traders from seeing and bidding on the stock.

The Iceberg Order allows institutional investors to trade large amounts of securities for their portfolios while keeping a low profile in the market. The invisible part of large orders reduces price movements that affect the supply and demand of the stock and allows for more discreet execution.

What Is the Iceberg Order Used for in Cryptocurrency Markets?

The purpose of using the Iceberg Order in the cryptocurrency markets varies depending on the users' trading desires. The main purpose of using the Iceberg order in the cryptocurrency markets is to ensure confidentiality and prevent possible volatile price movements. This method is used when a user wants to trade a large amount but wants to keep the transaction confidential. In this way, small orders can be placed without attracting attention on the order book.

At the same time, the Iceberg order is used by users who want to execute a large sell order but want to avoid panic by minimizing the loss of value during the execution of the sale.

What Is Order Book?

An order book is a list of orders that a trading platform uses to record the interest of buyers and sellers in a particular financial instrument. The order book is a manual or electronic list of buy and sell orders for a particular financial instrument organized by price level. It lists the quantity of shares offered or bid at each price point or market depth.