medium · Market Microstructure market-impact
An iceberg order is partially executed. The displayed size is immediately replenished.
How does this affect the 'Temporary Impact' of an ongoing buy program?
- It causes the displayed price to decay faster toward fair value overall.
- It increases temporary impact by repeatedly confusing the execution algorithm's fill logic.
- It converts what would be temporary impact into a lasting, permanent price impact.
- It reduces the temporary impact by providing more depth than initially visible.
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