Price Transparency

Price transparency is the ability to know all of the bid prices, ask prices, and trading quantities for a given stock, good, or service at any point in time. The ability of all market participants to "see" or deal at the same price.

Forex suffers from market fragmentations with many banks and brokers around the globe and a global order book and transaction volume and prices will be difficult to obtain.

In Forex trading it is the broker that provides a bid/ask spread and the liquidity. The pricing policy is set of in the terms of the particular Forex broker. One problem may be in fast markets the liquidity may intermittently be lower and thus the client may suffer from slippage and worse prices on trades executed than the bid/ask prices and liquidity previously posted by the broker.

For retail customers trading stocks on NYSE the best bid-ask prices are posted. The an extended view of the order book is provided at additional fees. On Nasdaq II quote system an order book is provided. However the market fragmentation with multiple market places trading the same stock and aggregated view of the order book may be difficult to assemble.

Price Transparency when talking about the economy in a general sense is the level of which information is available about products, services and capital assets and pricing structures. The amount of available information sets how free the economy is and the level of market efficiency. The more that is known about these factors the more efficient the market is.

Share this page:

Other words and terminology:

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z