Transparency (market)
In economics
Economics is the social science that analyzes the production, distribution, and consumption of goods and services. The term economics comes from the Ancient Greek from + , hence "rules of the house"...

, a market is transparent if much is know
KNOW-FM is the flagship radio station of Minnesota Public Radio's "news and information" network, primarily broadcasting a talk radio format to the Minneapolis-St. Paul market...

n by many about:
  • What products, services or capital asset
    Capital asset
    The term capital asset has three unrelated technical definitions, and is also used in a variety of non-technical ways.*In financial economics, it refers to any asset used to make money, as opposed to assets used for personal enjoyment or consumption...

    s are available
    Supply (economics)
    In economics, supply is the amount of some product producers are willing and able to sell at a given price all other factors being held constant. Usually, supply is plotted as a supply curve showing the relationship of price to the amount of product businesses are willing to sell.In economics the...

  • What price
    -Definition:In ordinary usage, price is the quantity of payment or compensation given by one party to another in return for goods or services.In modern economies, prices are generally expressed in units of some form of currency...

  • Where.

There are two types of price transparency: 1) I know what price will be charged to me, and 2) I know what price will be charged to you. The two types of price transparency have different implications for differential pricing.

This is a special case of the topic at transparency (humanities)
Transparency (humanities)
Transparency, as used in science, engineering, business, the humanities and in a social context more generally, implies openness, communication, and accountability. Transparency is operating in such a way that it is easy for others to see what actions are performed...


A high degree of market transparency can result in disintermediation
In economics, disintermediation is the removal of intermediaries in a supply chain: "cutting out the middleman". Instead of going through traditional distribution channels, which had some type of intermediate , companies may now deal with every customer directly, for example via the Internet...

 due to the buyer's increased knowledge of supply pricing.

Transparency is important since it is one of the theoretical conditions required for a free market
Free market
A free market is a competitive market where prices are determined by supply and demand. However, the term is also commonly used for markets in which economic intervention and regulation by the state is limited to tax collection, and enforcement of private ownership and contracts...

 to be efficient.

Price transparency can, however, lead to higher prices, if it makes sellers reluctant to give steep discounts to certain buyers, or if it facilitates collusion.

While the stock market is relatively transparent, hedge funds are notoriously secretive. Some financial professionals, including Wall Street veteran Jeremy Frommer
Jeremy Frommer
Jeremy Frommer, a hedge fund manager and entrepreneur from New Jersey, has been on Wall Street for over two decades. Over the course of his career, he has worked on both the buy-side and sell-side of the financial industry...

 are pioneering the application of transparency to hedge funds by broadcasting live from trading desks and posting detailed portfolios online.

Transparency in the Forex market

There are few markets that require the level of privacy, honesty, and trust between its participants as the FX market. This creates a great obstacles for traders, investors, and institutions to overcome as there is a lack of transparency. With little to no transparency traders ability to verify transactions becomes virtually impossible. Without transparency there is no trust between the client and the broker. Companies such as Fair Trading Technology
Fair Trading Technology
Fair Trading Technology is a technology provider company for online foreign exchange trading and forex information. It is mainly known for its technology service provided for Dukascopy Bank for ECN forex trading through their T3 Integration Bridge, which connects between MetaTrader 4 and...

  and their T3 Integration Bridge allows traders to trade with transparency and the ability to verify that each trade makes it to the market.

The company uses the bridge to connect traders to the world's largest ECN
ECN may refer to:* Eastern Counties Newspapers, a company now known as Archant* Eastman Color Negative, a photographic processing system for motion-picture films* Electrochemical noise, fluctuations of current and potential...

, Dukascopy Bank SA , by using MetaTrader 4
MetaTrader 4
MetaTrader 4, better known as MT4, is an electronic trading platform widely used by online retail foreign exchange speculative traders. It was developed by MetaQuotes Software and released in 2005. The software is licensed to foreign exchange brokers who provide the software to their clients. ...


See also

  • Shell corporation
  • Underground economy
    Underground economy
    A black market or underground economy is a market in goods or services which operates outside the formal one supported by established state power. Typically the totality of such activity is referred to with the definite article as a complement to the official economies, by market for such goods and...

  • Information
    Information in its most restricted technical sense is a message or collection of messages that consists of an ordered sequence of symbols, or it is the meaning that can be interpreted from such a message or collection of messages. Information can be recorded or transmitted. It can be recorded as...

  • Efficient market
  • Transfer pricing
    Transfer pricing
    Transfer pricing refers to the setting, analysis, documentation, and adjustment of charges made between related parties for goods, services, or use of property . Transfer prices among components of an enterprise may be used to reflect allocation of resources among such components, or for other...

  • Market anomaly
    Market anomaly
    A market anomaly is a price and/or return distortion on a financial market that seems to contradict the efficient market hypothesis.The market anomaly usually relates to:...

  • International Sugar Organization
    International Sugar Organization
    The International Sugar Organization is an intergovernmental organization, based in London, which was established by the International Sugar Agreement of 1968, as the body responsible for administering the Agreement...

  • Consumer protection
    Consumer protection
    Consumer protection laws designed to ensure fair trade competition and the free flow of truthful information in the marketplace. The laws are designed to prevent businesses that engage in fraud or specified unfair practices from gaining an advantage over competitors and may provide additional...

  • Consumer organization
    Consumer organization
    Consumer organizations are advocacy groups that seek to protect people from corporate abuse like unsafe products, predatory lending, false advertising, astroturfing and pollution.Consumer organizations may operate via protests, campaigning or lobbying...

  • Competition regulator
    Competition regulator
    A competition regulator is a government agency, typically a statutory authority, sometimes called an economic regulator, which regulates and enforces competition laws, and may sometimes also enforce consumer protection laws...

  • Extractive Industries Transparency Initiative
    Extractive Industries Transparency Initiative
    The Extractive Industries Transparency Initiative increases transparency over payments by companies to governments and to government-linked entities, as well as transparency over revenues by those host country governments...

      (or EITI)
  • Transparency (behavior)
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