A common feature of flash crash episodes in financial markets is that liquidity vanishes precisely when it is most needed. This column argues that this fragility can emerge as an equilibrium property when market participants cannot observe each other’s positions and order flow. Higher opacity degrades liquidity in good equilibria, creates the potential for bad equilibria, hurts the traders who most need to trade, and lowers welfare. Targeted transparency measures that reduce uncertainty about aggregate order flow, rather than full disclosure of proprietary positions, are needed to improve welfare. […]