What is Iceberg Order?

An iceberg order is an automated purchasing strategy — usually carried out by large institutional investment firms — that relies on software to divide a large purchase of an asset into several smaller limit orders. The objective of an iceberg order is to buy a large amount of an asset in smaller increments without disrupting the price of the asset with one large order. Iceberg orders are usually purchased in both visible and hidden increments. The name "iceberg" is denoted by the fact that the visible purchases are "just the tip of the iceberg."