What is an iceberg order?

Imagine you are looking at an iceberg in the ocean. The part above the water is very small, but underneath the water there is a huge part that you cannot see.

This is exactly how an iceberg order works in the financial market. How does it work?

• When someone wants to sell or buy a large amount of something (like stocks, currencies, etc.), instead of showing it all at once in the market (which could scare or manipulate other traders), they only show a small part of the order.

• Example: A buy order for 1,000 XRP can be configured to appear in the order book as 10 XRP.

Each time these 10 are “consumed” (bought or sold), the system automatically puts another 10 in their place, without the market knowing the real total that is still available.

Why is this useful?

1. Avoid drawing attention: If the market saw at once that someone wanted to buy or sell 1,000 XRP, others could react.

For example, if it's a big sale, the price could drop quickly because people would get scared.

2. Maintains control: It is a strategic way to execute large orders without affecting the price too much. A practical example:

• Imagine you want to sell 1,000 ice creams at school. If you advertise “I have 1,000 ice creams to sell!”, everyone might think: “Oh, he has a lot, the price will go down, I'll wait!”

• Instead, you put up a sign: “Selling 10 ice creams.” Every time 10 are sold, you put 10 more on the table.

People will think, “Wow, he always has 10, I’ll buy it now before it’s gone!” But they don’t know that you actually have a huge supply.

On the chart and in the market: In the financial market, an iceberg order can be used to disguise the intention of a trader or institution.

The market only sees the tip (the amount configured to appear), but every time this tip is consumed, another one appears, until the “hidden” total is consumed.

Many times, the major supports and major resistances are made in the form of icebergs, blocking the passage of batch renewal every time it tries to break through.

So, does it make sense? Share with others.