On This Page
Key Takeaways
- An iceberg order combines a displayed slice with a non-displayed reserve.
- A small slice works a large order without advertising its full size to the book.
- When the slice trades out, the venue reloads it from the reserve, so the same size keeps reappearing at one price.
- The worked 20,000-share order has 12,000 shares remaining after four 2,000-share fills.
- Read executed quantity and replenishing quotes together when studying activity at a price.
What is an iceberg order?
An iceberg order is a limit order that displays part of its quantity while keeping the remaining unexecuted quantity in reserve. The limit price sets its accepted execution boundary, and the display size controls how much interest appears in the visible book. As the displayed slice trades, the venue replenishes it from the reserve.
The venue’s rules decide when the slice refills, how much each reload shows and where the reload joins the queue at the limit price.
Formula
Reserve quantity = total order quantity − currently displayed quantity − cumulative executed quantity- The venue’s rule sets when the slice reloads: after each fill, or once it trades out.
- Randomized replenishment varies the size of each reload.
Iceberg order example: a 20,000-share sell order
A trader enters a 20,000-share sell iceberg at $60.00 with 2,000 shares displayed. Buyers execute against four complete displayed slices.
- Initial display: 2,000 shares; initial reserve: 20,000 − 2,000 = 18,000
- Executed after four slices: 4 × 2,000 = 8,000 shares
- Remaining total: 20,000 − 8,000 = 12,000 shares
- Next display: up to 2,000 shares; reserve behind it: 10,000 shares
The public book keeps showing 2,000 shares at $60 while the seller works 20,000. Every fill prints on the tape, and the reserve behind the slice stays off the book.
Executed, displayed and reserve shares add back to the original 20,000 at every step: 8,000 + 2,000 + 10,000 after the reload. Each fill prints on the tape while the reserve stays off the book.
How traders look for replenishing iceberg orders
Use time and sales to total executions at the price, and Level 2 market data to follow the visible quote updates.
If 12,000 shares execute against an initial 1,000-share display, 11,000 shares traded beyond that first slice, refilled from a reserve or from new orders at the price. When the prints keep landing and the price holds, the level is absorbing real size. Follow the fills, the reloads and the price response together to read it.
If the level holds, options flow shows whether large option orders lean the same way as the absorbing size, and the options profit calculator shows the trade’s loss through that level and its payoff at your target.
How to choose an iceberg order’s display size
For execution planning, compare slice size, total quantity and limit price. A larger display advertises more size; a smaller display keeps more of the order in reserve. Review completed quantity and average price throughout the order.
Limitations of iceberg orders
- A quote that keeps refilling at one price comes from one iceberg or from new orders by different traders, and the public book looks the same either way. Treat the reserve as a read from the prints.
- Queue priority for the reserve and each refreshed slice follows the venue’s rules. Check them before you route: the same order fills faster or slower depending on where its reloads join the queue.
- Total the prints at the price when reloads vary. Randomized replenishment changes the size of each reload, so executed volume shows the order’s size better than any one slice.
- Watch the tape for the hidden size. Completed trades are reported, so repeated prints at one price can point to the order.
- Set the limit where you want the whole order to trade. If the market moves away from it, the reserve stays unfilled.
Bottom line
An iceberg order works a large limit order through a small displayed slice, refilling the display from a hidden reserve as it trades. Choose the display size, total quantity and limit together, and when reading the tape, compare executed volume at a price with the visible quote to judge how much interest is trading there.
Clear answers
Frequently Asked Questions
Sources and Further Reading
- Cboe: Titanium U.S. Equities BOE Specification
- Nasdaq: OUCH 5.0 Specification
- Nasdaq: Update for Non-Displayed Reserve Orders
How entries are sourced, calculated and updated: editorial methodology.