What Is a ‘Hidden’ or ‘Iceberg’ Order and How Does It Relate to Market Impact?

A hidden or iceberg order is a large limit order where only a small portion (the "tip of the iceberg") is displayed publicly in the order book. The remaining, hidden portion is revealed only after the visible portion is executed.

This strategy is used by large traders to conceal their true order size, which prevents other market participants from anticipating their move and front-running them. By masking the size, they reduce the market impact and potential slippage of their overall trade.