How Does the Use of an Algorithmic Trading Strategy like VWAP Differ from an Iceberg Order?

A Volume-Weighted Average Price (VWAP) algorithm aims to execute a large order over a period of time, targeting an average execution price close to the market's VWAP for that period. It uses market participation rates and time slicing to minimize market impact.

An iceberg order, conversely, is a passive order type focused on minimizing the visual impact on the order book at a specific moment. VWAP is a time-based execution strategy; iceberg is a display strategy for a single order.