What is the iceberg?

The order of the glacier is a descriptive name for one order that is unusually large and has been divided into a series of smaller batch, which are individually placed according to the specified time line. The idea of ​​an order of this type is often to allow the investor to make a transaction without creating a major disruption on the market by purchasing or selling a huge amount of only one security at once. This strategy effectively places what is sometimes called the tip of the iceberg on the market at the moment, which makes it easier to carry out a transaction with a relatively little attention given by other investors.

The iceberg processing process is quite straightforward. The investor decides to buy or sell a huge amount of shares of the same security as the stock block. Rather than to cause a market where safety is traded to undergo serious changes due to a large number of shares involved, the investor will develop a number of transactions with a broker or seller. The broker continues to carry out these transactions according to the agreed timetableAs long as the entire order is completed, and avoids market fluctuations that can be undesirable for the investor or market.

For example, if the investor wanted to sell a million shares of the security as a glacier order, he may decide to give up all shares on the market at the same time. Instead, the broker is entitled to sell a million shares in many fifty thousand for six to eight weeks. At carefully distributed intervals, a broker on behalf of the investor sells another fifty thousand shares. The final result is that the market is not disturbed by incremental sale of so many shares and the value of shares held by other investors is not adversely affected. On the other hand, unloading all millions of shares at the same time could create significant changes on the market, including the way that the value of the shares decreases significantly.

To help the structuring of the glacial order, the software programs are often used toDevelopment of logistics. This helps to ensure that each order segment is carried out at the right time and under the right conditions to keep the effect on the market to a minimum. At the end of a series of transactions, the investor either sold or purchased the required number of shares, and the shares were awarded at the price that was acceptable to the investor. Meanwhile, the public will never notice the order of Iceberg, because there has never been a huge order, only a number of smaller orders that are overlooked in general everyday activities on the market.