How to Spot Iceberg Orders When Trading

An Iceberg order is a large market order that hits the market. These typically come from large institutions. As technology improved institutions realized that other traders could utilize this information and trade off of it. If their technology was fast enought they could front run them by buying the stock before they did and selling it to the instituion at a higher price. Because of front running instituions utilized algorithms to split their large orders into smaller ones.

In terms of identifying actual icebergs one option is to view the DOM on your trading platform. You should see spikes in volume. Both Tradestaion and Ninja Trader have excellent DOM applications. For an in depth, real time view of spotting icebergs check out our training video.