Disclosed quantity orders
A disclosed quantity order is a limit order in which the trader specifies that only a fraction of the total order quantity should be visible in the public order book (the market depth) at any given time. The remaining quantity, the undisclosed portion, is held by the exchange and released into the book as successive tranches of the disclosed quantity are filled. The exchange matching engine treats the full order quantity as active, but only market participants see the disclosed portion.
Disclosed quantity orders are supported by the National Stock Exchange and the Bombay Stock Exchange at the exchange level, making them different from the broker-side iceberg order facility available on Kite.
Regulatory framework and exchange definition
NSE and BSE define disclosed quantity orders as a standard order attribute under their trading regulations. The exchange-level rules for disclosed quantity are:
- The disclosed quantity must be a minimum of 10% of the total order quantity.
- The disclosed quantity must not exceed the total order quantity.
- The disclosed quantity must be a round lot (consistent with the exchange’s minimum lot size for the instrument).
- At each refresh, the next disclosed tranche receives a new time stamp, it goes to the back of the queue at that price level.
This time-stamp reset is an important distinction: when a tranche is filled and the next tranche is released, the new tranche does not retain the time priority of the original order. It is treated as a new order at the current time. This means disclosed quantity orders may be at a time-priority disadvantage compared with a single full-size limit order at the same price.
How to place a disclosed quantity order on Kite
Zerodha’s Kite platform exposes the disclosed quantity field in the order placement form for eligible instruments. The field appears alongside quantity, price, and order type fields. The trader enters:
- Total quantity: The full amount to be bought or sold.
- Disclosed quantity: The portion to be shown publicly at any time (minimum 10% of total).
Kite sends both parameters to the exchange. The exchange handles the tranche release mechanism.
Disclosed quantity is available for limit orders only. Market orders do not support disclosed quantity, a market order executes immediately against available counter-orders and does not rest in the book.
Difference between disclosed quantity and iceberg orders on Kite
Both mechanisms achieve the same market-impact-reduction objective, but they differ in implementation:
| Feature | Disclosed quantity | Iceberg order (Kite) |
|---|---|---|
| Implementation level | Exchange (NSE/BSE) | Broker (Zerodha/Kite) |
| Time-stamp on refresh | New timestamp (loses priority) | New order, new timestamp |
| Minimum tranche | 10% of total | Determined by number of legs |
| Configuration | Single disclosed quantity amount | Number of legs (divides total) |
| Visibility to exchange | Full order book (hidden portion tracked) | Each tranche is a separate order |
| Tranche size flexibility | Flexible (any 10%+ amount) | Fixed (total / legs) |
The disclosed quantity mechanism keeps the entire order as a single exchange order (with a hidden pool), whereas the Kite iceberg order sends each tranche as a separate, independent order.
Market impact reduction, rationale
A large visible order in the order book signals a major buyer or seller to other market participants. Sophisticated traders, including high-frequency trading firms, can identify large resting orders and trade ahead of them (“front-running” in the informal sense, though not in the legal sense if done without insider information). By showing only a small disclosed quantity:
- The true size of the order is hidden, reducing information leakage.
- Sellers (for a large buy order) do not raise their prices in anticipation of absorbing the full quantity.
- Market impact, the adverse price movement caused by a large order, is reduced.
Disclosed quantity orders are particularly useful for:
- Institutional investors accumulating or distributing large equity positions.
- Traders building large F&O positions in moderately liquid contracts.
- Portfolio rebalancing operations involving significant quantities.
Time-priority trade-off
The minimum 10% disclosure requirement and the time-stamp reset on each tranche mean that disclosed quantity orders sacrifice some time priority for the benefit of reduced information leakage. Whether this trade-off is worthwhile depends on the relative cost of information leakage versus the cost of time-priority loss in the specific instrument and market conditions.
In instruments with high liquidity and deep order books (Nifty futures, large-cap stocks), time priority matters significantly and the tranche reset can mean slower fills. In moderately liquid instruments where information leakage is the greater risk, the trade-off generally favours disclosed quantity.
Limits on disclosed quantity
The 10% minimum rule is strict. An order for 1,000 shares must disclose at least 100 shares. An order for 100 shares must disclose all 100 shares (since 10 shares would be the 10% minimum, but this may conflict with the instrument’s minimum lot size).
The exchange automatically enforces the 10% minimum. An order specifying a disclosed quantity below the minimum will be rejected with an error message.
Segment availability
Disclosed quantity orders are available for:
| Segment | Available |
|---|---|
| NSE equity (cash) | Yes |
| BSE equity (cash) | Yes |
| NSE equity F&O | Yes |
| BSE equity F&O | Yes |
| Currency derivatives | Exchange-specific, typically yes |
| Commodity (MCX) | Exchange-specific, consult MCX rules |
Common mistakes and edge cases
Setting disclosed quantity too small. A disclosed quantity of exactly 10% of a large order creates many small tranches. Each tranche competes at the back of the time-priority queue on refresh. In a fast market, this can significantly slow the fill of the overall order.
Using disclosed quantity in illiquid instruments. In a stock with very low daily volume, any size order is conspicuous. Disclosed quantity may not effectively hide the true intent in instruments where even small quantities are unusual.
Modifying the order. Modifying a resting disclosed quantity order (changing price or quantity) cancels the existing order and places a new one, resetting the time priority from scratch.
Assuming full quantity is always eventually filled. Like any limit order, a disclosed quantity order will expire at the end of the trading day (DAY validity) with any unfilled quantity cancelled. If the market never returns to the limit price, the full disclosed quantity may not be filled in one session.
Regulatory context
SEBI and the exchanges govern disclosed quantity orders under their general market microstructure regulations. NSE’s trading regulations define the disclosed quantity rules (minimum 10%, time-stamp behaviour) in the exchange’s operations handbook. SEBI’s framework for market manipulation explicitly addresses situations where disclosed quantity might be used deceptively (for example, placing a large undisclosed order to create false impressions of market depth). Legitimate use of disclosed quantity for market-impact reduction is, however, a standard institutional practice.
References
- NSE Market Operations Handbook, Disclosed Quantity Orders section.
- BSE trading regulations, Chapter 4: Special Order Parameters.
- Zerodha support article: “Disclosed quantity on Kite”, support.zerodha.com.
- SEBI circular on market microstructure and order types, SEBI/HO/MRD/2023.
- NSE circular on order book management, NSE/CMPT/2018 series.