Iceberg Orders

[sails]

Just wondering if there is a "usual" outcome for iceberg orders. There appears to be one going on at the ask of CBA at 2810 right now - and yet someone keeps buying them each time they are replaced.

Any clues for direction ?? Any thoughts would be much appreciated

 

[MRC & Co]

Hi Sales,

More of a feel I think.

But I would say, they are usually broken and price runs through.

Didn't look in the CBA example you talk of, but generally, they are placed in the way of a trend. Which will hold the trend up for the duration of the iceberg. There is no point placing an iceberg on the bid, in an uptrend, as price will just trade away from it without knowing it is there. So you are better off just showing your size and hoping someone on the other side will clip it. If not, pull it and hope they trade down in your direction hoping it was a spoof.

Not much help. Sometimes they will be broken and squeeze back the other way, just like big size. All depends on how the market is reacting at that point in time. Another reason I guess it's important to know a specific market intimately.

Sorry I couldn't be of much help, lol.

 

[sails]

Thanks MRC - it ended up breaking through the iceberg - then closed back down near the iceberg price. Was quite interesting to watch as the buyers kept chomping through them. Each time it got down to about 5,000 shares, it would immediately increase by about 25,000.

The short term trend was up (weakly) this avo, with the main trend is still down. Certainly a lot of shares changed hands at that iceberg price. Will watch to see how it goes from here.

 

[MRC & Co]

The short term trend was up (weakly) this avo, with the main trend is still down. Certainly a lot of shares changed hands at that iceberg price. Will watch to see how it goes from here.

Yeh, the current (short-term) trend would be all that matters. Whoever placed it just wanted to get out of positions. Obviously, someone else wanted in. They are really only important for scalpers, as you are trying to establish supply and demand in that exact second. If it is large enough, or the trend not strong enough, price will trade away from it and it will change the flow.

Sounds like an iceberg though, as it was refreshing with the same number, technically, if it refreshes with various different numbers each time, it's called a 'growler', which is meant to be harder to spot. But all the same.

 

[sails]

With current interest in DOM and to make more sense of this thread, below is a 5 minute chart of what seemed to be an iceberg in the ask of CBA on Dec 11th at $28.10. It went on for nearly two hours before breaking out to the upside in the afternoon.

Have also included a 15 minute chart and shows what happend in the days that followed. CBA came out of a trading halt for a couple of days with large down gap. In hindsight, I have wondered if this iceberg order was a sign of things to come.

There was exceptionally large volume when CBA opened lower after the gap which would be explained a bit large quantities of put exercises especially being so close to options expiry. There would have been plenty of liquidity for the iceberg trader/s to exit or reverse.

Haven't spent a lot of time watching DOM until recently, so these long, persistant iceberg orders may actually be more frequent than I realise and may not mean much at all for the days ahead. Time will tell...

 

[sails]

the ASF software won't put my two charts in the right order - so here's the second one here:

 

[MRC & Co]

Hi Sails,

Interesting, I've never really thought of what happens days after, but worth a look at.

Personally, I don't think you could find much of an edge days down the track. It's just the same as someone big wanting in or out and going to market, but an iceberg is probably a way to get better fills as most day traders will want to test it and so the iceberg will get it's fills.

Let me know what you come up with!

 

[sails]

Hi Sails,

Interesting, I've never really thought of what happens days after, but worth a look at.

Personally, I don't think you could find much of an edge days down the track. It's just the same as someone big wanting in or out and going to market, but an iceberg is probably a way to get better fills as most day traders will want to test it and so the iceberg will get it's fills.

Let me know what you come up with!

Cheers MRC - Will keep watching and certainly let you know if anything useful shows up.