In the fast-moving world of modern share trading, staying ahead often means using tools that most of the market doesn’t even see. Enter the ‘iceberg order’—a powerful trading tactic that’s gaining traction among both institutional and sophisticated retail investors in Australia. With the ASX continuing to modernise its trading infrastructure in 2025, understanding how iceberg orders work could give you a significant edge.
What is an Iceberg Order?
Picture an iceberg: only a small part floats above the water, while the bulk remains hidden below. An iceberg order works similarly. It allows traders to buy or sell large quantities of shares without revealing the full size of their order to the market. Instead, only a fraction—known as the ‘peak’—is visible in the public order book at any one time. When that visible portion is filled, the next ‘slice’ of the order appears, and so on, until the whole order is executed.
- Example: Suppose an institutional investor wants to buy 100,000 shares of CSL Limited. Placing the full order openly could push up the share price as other market participants spot the demand. With an iceberg order, only 5,000 shares (the peak) are visible. As each 5,000-share chunk is filled, another appears, keeping the overall intent under wraps.
Why Iceberg Orders Are Booming in 2025
The use of iceberg orders has surged in Australia in 2025, thanks to several market and regulatory developments:
- ASX’s new trading platform: The Australian Securities Exchange completed a major upgrade in late 2024, supporting more advanced order types and faster execution, making iceberg orders easier and more efficient to use.
- Algorithmic trading growth: With more market participants using algorithms, iceberg orders help manage the risk of sudden price swings triggered by large, visible trades.
- Regulatory clarity: The Australian Securities and Investments Commission (ASIC) updated its market integrity rules in early 2025, confirming the legitimacy of iceberg orders when used transparently and in accordance with best execution obligations.
For Australian investors, this means iceberg orders are not just the domain of global hedge funds—they’re now accessible via many local brokers and trading platforms.
Benefits and Risks of Iceberg Orders
Iceberg orders can be a powerful tool, but they’re not without their challenges:
Benefits
- Reduced market impact: By hiding the true size of your order, you avoid moving the price against yourself.
- Stealth execution: Other traders are less likely to front-run or react to your large orders.
- Greater flexibility: Especially useful for illiquid stocks or when trading during volatile market periods.
Risks
- Partial fills: If liquidity dries up, you may not get your entire order filled at your preferred price.
- Detection by smart traders: Sophisticated algorithms can sometimes spot iceberg patterns, which might lead to your intentions being inferred.
- Higher fees: Some brokers charge extra for advanced order types or route these orders through premium execution services.
How to Place an Iceberg Order in Australia
Most advanced trading platforms on the ASX and Chi-X now offer iceberg order functionality. Here’s how to get started:
- Choose your broker: Look for brokers that support advanced order types and offer direct market access (DMA).
- Set your total order size: Decide how many shares you want to buy or sell in total.
- Define your ‘peak’ size: Specify how much of your order will be visible at any one time (e.g., 5,000 shares).
- Monitor execution: Track how your order is being filled and adjust parameters if needed, especially in fast-moving markets.
Tip: Many platforms now let you automate this process, so you can set it and forget it—just be sure to review your broker’s fee schedule and execution policies first.
Real-World Use: Iceberg Orders in Action
In 2025, a major Australian super fund used iceberg orders to rebalance its portfolio after new APRA guidelines encouraged increased exposure to tech stocks. By slicing large trades into multiple small peaks, the fund was able to accumulate millions of shares in emerging ASX-listed tech companies without causing disruptive price spikes. This approach helped the fund achieve better average prices for its members and avoided tipping off the broader market about its strategy.
The Bottom Line
Iceberg orders are no longer Wall Street’s best-kept secret—they’re a mainstream tool for Australian investors who want to trade smarter. With regulatory support, improved tech, and growing broker access, now’s the time to explore how iceberg orders could fit into your own trading toolkit. Whether you’re running a portfolio or just looking to sharpen your edge, understanding—and using—iceberg orders could mean better results in 2025 and beyond.
