What Is the ‘Iceberg Order’ Technique and How Is It Related to Dark Pools?

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

This technique is an on-exchange method to reduce market impact and is a less private alternative to dark pools, which hide the entire order.