Chapter 4
Iceberg Orders
Understand recurring executions and replenishment patterns
What does it mean?
An iceberg order exposes part of its total quantity while more can become visible later. CloudCraft looks for execution and replenishment patterns resembling this behaviour; it does not always receive a confirmed iceberg identifier from the exchange.
Why does it matter?
Showing a large order in full can invite other traders to move the price against it, so exchanges let traders display only part of an order. On Binance, iceberg orders are available for limit and stop-limit orders and can be split into at most 100 parts; Borsa Istanbul offers the same idea as a partially displayed order.
Hidden liquidity is not a small share. A study of Euronext Paris found that hidden orders made up 44% of order volume (Bessembinder, Panayides and Venkataraman, 2009). A non-peer-reviewed study of E-mini S&P 500 futures estimated that about 4% of traded volume came from the exchange's native iceberg orders (Zotikov and Antonov, 2019). Another study showed that hidden depth can be detected from order flow and that detection is frequent (De Winne and D'hondt, 2007).
In short, the visible order book shows only part of real supply and demand.
Hidden liquidity is not a small share. A study of Euronext Paris found that hidden orders made up 44% of order volume (Bessembinder, Panayides and Venkataraman, 2009). A non-peer-reviewed study of E-mini S&P 500 futures estimated that about 4% of traded volume came from the exchange's native iceberg orders (Zotikov and Antonov, 2019). Another study showed that hidden depth can be detected from order flow and that detection is frequent (De Winne and D'hondt, 2007).
In short, the visible order book shows only part of real supply and demand.
How do you read it in CloudCraft?
The current interface uses a B badge. Bid-side detections are green and ask-side detections red. The tooltip can show executed volume, execution count and a confidence score.
Settings > Detection contains iceberg visibility, price step and minimum trade count. The iceberg price step is separate from the main heatmap's Step control.
Settings > Detection contains iceberg visibility, price step and minimum trade count. The iceberg price step is separate from the main heatmap's Step control.
How do you use it?
If similar-sized trades repeatedly execute at one level while visible liquidity replenishes, examine that pattern alongside the price response. Stalling, continuing through the level and later retesting it are different observations.
Key points
Confidence is not the probability of a future reversal or a win rate. Any remaining-order estimate is an estimate. Icebergs and hidden liquidity are related but distinct concepts; distinguish the B and G markers.
Sources
- What Is an Iceberg Order (Binance, 2023)
- Pay Piyasası: Piyasa İşleyişi (Borsa İstanbul)
- Bessembinder, Panayides, Venkataraman. Hidden liquidity: An analysis of order exposure strategies in electronic stock markets (Journal of Financial Economics, 2009)
- De Winne, D'hondt. Hide-and-Seek in the Market: Placing and Detecting Hidden Orders (Review of Finance, 2007)
- Zotikov, Antonov. CME Iceberg Order Detection and Prediction (arXiv, 2019)
This content is for education and analysis only, not investment advice. Market tools offer probability and context, not certainty; the decision is the user responsibility.