A hidden order is a trading order which instructs a broker to break up a large order into multiple small segments which are sent to exchanges as individual orders. Hidden orders are similar to iceberg orders, which also break a large order into multiple smaller orders, with the difference that segments are so small that they have virtually no effect on market rates whatsoever.
Hidden orders are sometimes used by investors looking to buy or sell securities anonymously, as the small size of individual transactions means that they do not normally trigger investigations or require declarations. Hidden orders are primarily carried out via algorithmic trading using algorithms which randomize the placement of orders to prevent the formation of revealing patterns.
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