Hidden order groups refer to collections of trading orders that are not fully visible on a public order book. These orders, often large in size, are typically broken into smaller, publicly displayed segments. This strategy allows institutional traders to execute substantial trades without significantly impacting market prices. It reduces the risk of adverse price movements due to market participants reacting to large disclosed orders.
Context
In traditional financial markets, hidden order groups are a common practice for large volume traders. Their application in cryptocurrency exchanges, particularly centralized ones, helps manage liquidity and minimize slippage for significant positions. Understanding their operation provides insight into sophisticated trading strategies and market depth dynamics. The transparency of decentralized exchanges presents different challenges for such order types.
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