Hidden Order
An order that doesn't appear on the publicly visible order book at all, executing only when matched, to avoid revealing trading intent to other market participants.
A hidden order is an order type that doesn't appear anywhere on an exchange's publicly visible order book, remaining completely invisible to other market participants until it actually executes against a matching counter-order. This differs from an iceberg order (see Kaavon's "Iceberg Order" glossary definition), which does display a small visible portion on the book while hiding the rest — a hidden order shows nothing at all.
Traders use hidden orders specifically to avoid revealing their trading intentions to other participants, including algorithmic traders who might otherwise detect and trade ahead of a large visible order's likely price impact. The tradeoff is that hidden orders on many exchanges receive lower execution priority than visible orders at the same price, since exchanges commonly reward visible liquidity with priority in their matching logic, meaning a hidden order may wait longer to fill than an equivalent visible one.
Examples
- A trader placing a large hidden order avoids signaling their trading intent to other market participants, unlike placing the same size as a visible limit order.
- Many exchanges give visible orders matching priority over hidden orders at the same price, meaning a hidden order can sometimes take longer to execute.