Price transparency is a term used in financial markets to refer to the extent to which the prices of financial instruments are visible and accessible to all market participants. It describes the degree to which the price of a financial instrument is publicly known, easily observable, and disseminated in a timely manner.
In a transparent market, all market participants have access to the same price information, which enables them to make informed trading decisions. The level of transparency in financial markets can vary, depending on factors such as the type of asset, the trading venue, and the regulatory framework. For example, exchange-traded markets are generally more transparent than over-the-counter (OTC) markets, which are more opaque and may have less standardized pricing.