Iceberg Order

An iceberg order is a large order to buy or sell a stock that is split into multiple smaller orders. This is done to avoid market impact, which is the sudden and dramatic change in the price of a stock that can occur when a large order is placed.

There are two types of iceberg orders: market iceberg orders and limit iceberg orders. A market iceberg order is filled at the market price as the individual orders are placed. A limit iceberg order is filled at a specified price or better as the individual orders are placed.

Iceberg orders can be used by investors to trade large blocks of stock without causing a sudden and dramatic change in the price of the stock. This can be beneficial for investors who want to avoid market impact or who want to trade large blocks of stock without revealing their intentions to other market participants.

However, iceberg orders can also be used by market manipulators to artificially inflate or deflate the price of a stock. For example, a market manipulator could place a large market iceberg order to buy a stock, which would cause the price of the stock to rise. The market manipulator could then cancel the order before it is filled, which would cause the price of the stock to fall.

Overall, iceberg orders can be a useful tool for investors, but they can also be used by market manipulators. It is important for investors to understand the risks associated with iceberg orders before using them.

Here are some additional details about iceberg orders:

• Iceberg orders are often used by institutional investors, such as hedge funds and mutual funds.
• Iceberg orders can be placed through a broker or through an electronic trading platform.
• The size of an iceberg order can vary, but it typically ranges from 100,000 shares to 1 million shares.
• Iceberg orders can be held for a short period of time, such as a few days, or for a longer period of time, such as a few months.

If you are considering using an iceberg order, it is important to speak with your broker or financial advisor to understand the risks and benefits involved.