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Advance Trading: Reserve/Iceberg Order

Mar 02, 2020
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byNDAX Labs

A Reserve or Iceberg order is a large trade that is divided up into multiple limit orders. The orders are split into visible and concealed amounts. The concealed orders become visible as the visible portions are executed.

The purpose of a reserve or iceberg order is to hide the total order quantity. Iceberg orders have their name because the visible parts of the order are “just the tip of the iceberg” because the remaining limit orders are not visible or known to the market.

Iceberg or reserve orders are most often deployed by large institutional investors that will buy or sell cryptocurrencies in large amounts who do not want to signal or reveal to the market what their next big trade will be. Typically, only a small amount of their total order is visible at any given time to prevent tipping off the market. By having the ability to hide or mask the total order amount, a reserve or iceberg order can reduce price movements that can be caused by significant changes to the supply and demand of a particular cryptocurrency.

For example, imagine a large institutional trader wants to avoid placing a large sell order that could tip off other traders or cause panic in the market. To avoid these risks, the trader places a series of smaller limit orders to mask their intention of selling a large amount of cryptocurrency. Similarly, a large institutional trader that is planning to buy a cryptocurrency at its lowest possible price might want to strategically disguise placing a large buy order that could indicate their intention to other traders who could try and bid up the price.


Cryptocurrency traders can try to identify a reserve or iceberg order by identifying a series of limit orders coming from a single source. The limit orders coming from the single source might constantly reappear on the order book used by the exchange.

For example, a large institutional trader could break up an order to buy 100 Bitcoin into ten orders of 10 Bitcoin each. Other traders would need to keep a close eye on the trading patterns of the large institutional trader to identify that they are using a reserve or iceberg order in their trading strategy. Traders who are able to identify a reserve or iceberg order might try to get involved by buying shares slightly above the price levels being set by the large institutional trader knowing that there is a high level of demand for Bitcoin emanating from the iceberg order.

In another example, assume an active day trader notices an unusually high selling volume at a certain price. The exchange’s order book could be used to identify that the selling volume is coming from a series of similarly-sized sell orders coming from the same source. If the active day trader identifies the unusually high selling volume as coming from a reserve or iceberg order, the day trader could short sell the cryptocurrency as a result of the strong selling pressure resulting from the iceberg order.


When executing a reserve or iceberg order, the visible portion of the order will be filled first. The hidden institutional of a reserve or iceberg order will only execute once it has become visible on an order book.

Example of a Reverse or Iceberg Order

• Imagine that a large institutional trader wants to invest $100,000,000 in Bitcoin. In theory, news of the trader’s investment could cause an upward spike in the price of Bitcoin in a short amount of time. In order to avoid the upward spike in price, the large institutional trader could use a reverse or iceberg order to break up the original order into smaller orders of $10,000,000 each.

How to Place an Immediate or Cancel (IOC) Order on NDAX (on the trading page)
• Login to https://ndax.io/
• Once you log in you will be redirected to your dashboard
• Click TRADE on the left-hand side of the screen
• On the trade page, click BUY (Green button) or SELL (Red Button) on the right side of the screen
• Click the small GREY ARROW in the upper left corner of the screen to pick the CRYPTOCURRENCY/CAD pair.
• Click the small GREY ARROW on the pop-up to display the dropdown list of Advanced trade orders.
• Click on IOC
• ENTER ORDER SIZE
• ENTER LIMIT OFFSET
• ENTER THE DISPLAY QUANTITY
• Click PLACE BUY/SELL ORDER