P r e l i m i n a r y Abstract In this paper we examine the effects of the amount of trade disclosure in an experimental financial market, in which nine professional traders set quotes and trade continuously. In addition to these market makers, two computerized external customers interact, representing both informed and liquidity or noise traders. The amount of transaction information is varied, whereas the level of price information is held constant at a low level. From our results it becoms

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... ear that that uninformed traders gain from an increase in the level of transparency. This gain from transparency comes at the cost of the informed traders. In terms of spreads, we find significant wider opening spreads in transparent markets in contrast with opaque markets. The differences in spreadsize dissappear over time in such a way that the spreads in the transparent markets narrow whereas in opaque markets they remain constant. Finally, we find that transparency significantly enhances the price discovery process. 1 7