{"id":319932,"date":"2022-04-04T09:17:48","date_gmt":"2022-04-04T03:47:48","guid":{"rendered":"https:\/\/zerodha.com\/z-connect\/?p=319932"},"modified":"2024-02-02T13:50:15","modified_gmt":"2024-02-02T08:20:15","slug":"introducing-iceberg-orders-and-order-validity-in-minutes","status":"publish","type":"post","link":"https:\/\/zerodha.com\/z-connect\/kite\/introducing-iceberg-orders-and-order-validity-in-minutes","title":{"rendered":"Introducing Iceberg orders and order validity in minutes"},"content":{"rendered":"

Hindi: Iceberg \u0911\u0930\u094d\u0921\u0930 \u0914\u0930 \u092e\u093f\u0928\u091f\u094d\u0938 \u092e\u0947\u0902 \u0911\u0930\u094d\u0921\u0930 \u0915\u0940 \u0935\u0948\u0932\u093f\u0921\u093f\u091f\u0940 \u0938\u0947 \u092a\u0930\u093f\u091a\u092f\u00a0<\/a><\/p>\n

Note: Please update the Kite mobile app, if you don’t see the Iceberg order type.\u00a0<\/strong><\/p>\n

Iceberg is an order type that slices orders of larger quantity (or value) into smaller orders, where each small order, or leg, is sent to the exchange only after the previous order is filled.<\/span><\/p>\n

This helps reduce the impact cost of execution in addition to not revealing large orders in the market depth bids and offers. Icebergs are a very popular order type amongst institutional traders, and we are excited to introduce this to the retail traders in India.\u00a0<\/span><\/p>\n

Impact cost<\/span><\/h3>\n

Impact cost represents the difference in the actual traded price as compared to the price of the instrument when the order was placed. For example, if a market order to buy 1000 shares was placed when the stock was trading at \u20b9100, and if the actual execution price was \u20b9100.5, this \u20b90.5 x 1000 = \u20b9500 would be the impact cost for the order. Similarly, if a limit order to buy 1000 shares was placed at \u20b9100 when the stock was trading at \u20b9100 and was later modified to 100.3 to get a fill, then 0.3 x 1000 = \u20b9300 is technically the impact cost.<\/p>\n

As the size of the order increases, the impact cost goes up as well. Traders with large order values end up losing a lot more money to impact costs as compared to all other charges combined (STT, Brokerage, exchange transaction, etc).<\/p>\n

How do Icebergs work?<\/span><\/h3>\n

As the name suggests, when a large order is placed, it is divided into smaller orders or legs, and only the first leg is placed on the exchange at first, revealing only the tip of the iceberg. Once this leg is executed, the next leg of the main order is placed, and so on, until the desired quantity is traded. The number of legs is decided by the customer.\u00a0<\/span><\/p>\n

Follow these steps to place an Iceberg order:<\/span><\/p>\n

    \n
  1. Click on Iceberg on the order window.<\/span><\/li>\n
  2. Select <\/span>Intraday<\/span><\/i> or <\/span>Overnight<\/span><\/i>.<\/span><\/li>\n
  3. Enter <\/span>Quantity<\/span><\/i> and the <\/span>Price<\/span><\/i>.<\/span><\/li>\n
  4. Select <\/span>Market<\/span><\/i> or <\/span>Limit<\/span><\/i>.<\/span><\/li>\n
  5. Enter the <\/span>Number of legs <\/span><\/i>and click on <\/span>Buy<\/span><\/i> or <\/span>Sell<\/span><\/i>.<\/span> The maximum number of legs per Iceberg is 10.\u00a0<\/span><\/li>\n<\/ol>\n
    Example scenario<\/span><\/h5>\n

    An order for Nifty CE of 3000 quantity (60 lots) can be divided into 5 orders of 600 each by selecting the number of legs. This way, every subsequent order of 600 will be executed only once the previous orders are executed.<\/span><\/p>\n

    \"\"

    Iceberg orders<\/p><\/div>\n

    Important<\/b><\/p>\n