How Do ‘Iceberg Orders’ Attempt to Minimize Market Impact on Public Exchanges?

An iceberg order is a large limit order that is electronically divided into smaller, visible limit orders. Only a small portion (the 'tip of the iceberg') is displayed on the public order book, while the rest remains hidden.

As each visible portion is filled, a new portion is automatically displayed. This strategy minimizes market impact by concealing the true size of the block trade, preventing other traders from reacting to the full order size.