Define ‘Iceberg Order’ and Its Impact on Perceived Order Book Depth.
An iceberg order is a large limit order that is split into smaller, visible parts (the 'tip') that are displayed in the order book, while the majority of the order remains hidden. Its impact is that it causes the perceived order book depth to be lower than the actual depth, as the hidden volume is not visible to other traders.
Glossar
Iceberg Order
Display ⎊ The iceberg order is a specialized limit order that strategically manages the visibility of a large trading volume on the exchange's order book.
Order Book
Depth ⎊ An order book represents a listing of buy and sell orders for a specific cryptocurrency, option contract, or derivative, displaying price and quantity at various levels.
Order
Execution ⎊ An order, within cryptocurrency, options, and derivatives, represents a conditional instruction communicated to an exchange or trading venue to buy or sell an asset at a specified price or under defined parameters.
Limit Order
Instrument ⎊ A limit order is an instruction to trade an asset at a specified price or better, providing the trader with precise control over the entry or exit cost, unlike a market order.
Order Book Depth
Depth ⎊ Order Book Depth refers to the quantity of outstanding buy and sell orders aggregated at various price levels away from the current market price in a derivatives exchange.