Iceberg orders are a powerful automated trading strategy designed for executing large-volume transactions while minimizing market impact and slippage. By breaking down large orders into smaller sub-orders, this approach allows traders to enter markets quickly and efficiently.
Key Benefits of Iceberg Orders
- Price limit support: Set upper/lower price boundaries for precise order execution in volatile markets.
- Hidden order size: Only a small portion of the total order is visible at any time.
- Reduced market impact: Prevent price volatility and front-running by other traders.
How Iceberg Orders Work
Traders configure total order quantity along with these parameters:
- Split settings (order size or sub-order count)
- Order preferences
- Price limits
Once activated, the system sequentially executes sub-orders while automatically replenishing them until completion.
Split Configuration Options
| Option | Description |
|---|---|
| Per-order size | Specifies quantity for each sub-order |
| Sub-order count | Determines total number of order splits |
Order Preference Types
Bybit offers four execution styles:
| Preference | Target | Mechanism | Best For |
|---|---|---|---|
| Chase Limit (Taker) | Speed priority | Aggressive pricing at best ask/bid | Time-sensitive executions |
| Chase Limit | Balanced execution | Pricing at current bid/ask | Traders wanting maker fills |
| Chase Limit (Offset) | Cost-efficient speed | Fixed price offset from market | Controlled-cost strategies |
| Fixed Price | Price precision | Static pricing | Specific entry/exit points |
Price Limit Functionality
This advanced feature pauses orders when market conditions become unfavorable:
- Buy orders: Only execute when Last Traded Price (LTP) ≤ upper limit
- Sell orders: Only execute when LTP ≥ lower limit
Note: Available only for Chase Limit order types.
Practical Example
Scenario: Buying 6 BTC via iceberg order
- Sub-order size: 0.6 BTC
- Order preference: Chase Limit
- Price limit: $20,000
Execution Flow:
- System splits order into 10 sub-orders
- First 0.6 BTC executes at best bid
- Subsequent orders trigger sequentially
- Entire order completes when all sub-orders fill below $20,000
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Platform-Specific Rules
| Market Type | Maximum Quantity Rules |
|---|---|
| Spot | 100x max single order size |
| Contracts | 20x max order size |
Additional Limitations:
- 7-day sub-order expiration
- 28-day total strategy duration
- 10 active orders per account
- 1 order per trading pair
Strategy Termination Triggers
Common cancellation reasons include:
- Insufficient balance
- Manual termination
- Position mode changes
- Risk limit breaches
- Approaching settlement
- Account restrictions
Step-by-Step Implementation Guide
- Log into Bybit account
- Select desired trading pair
- Choose "Iceberg Order" from order types
Configure parameters:
- Total quantity
- Split method
- Order preference
- Price limit
- Review and confirm
- Monitor via "All Orders" tab
Pro Tip: Use the "Terminate" option under Tools to cancel active strategies.
FAQ: Iceberg Order Essentials
Q: How does an iceberg order differ from a regular limit order?
A: Unlike standard limit orders that display full size, iceberg orders gradually reveal small portions to minimize market impact.
Q: Can I modify an active iceberg order?
A: No, parameters cannot be changed after activation. You must cancel and recreate the order.
Q: What happens if the market moves beyond my price limit?
A: The system automatically pauses execution until prices return within your specified range.
Q: Are iceberg orders suitable for fast-moving markets?
A: Yes, particularly when using taker-style execution preferences that prioritize speed over price.
Q: How do I track iceberg order progress?
A: Monitor via the "Active Orders" section, which shows completed sub-orders and remaining quantities.
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Q: What's the minimum account balance for iceberg orders?
A: Requirements vary by instrument, but you'll need sufficient margin for all potential sub-orders plus position maintenance margins.