Last look is a practice in electronic FX trading where a liquidity provider, after receiving a trade request at its quoted price, gets a final short window to accept or reject that trade. During this window, usually a few milliseconds, the provider checks that the request is valid and that the price is still in line with the current market. If the market has moved, the trade can be rejected and the client gets no fill. Last look is common with bank and non-bank liquidity providers and, through them, affects the execution that retail brokers can offer.
How last look works: step by step
- Quote: the liquidity provider streams a price, for example EUR/USD ask 1.10000.
- Trade request: the client or broker sends an order to buy at 1.10000.
- Last look window: the provider holds the request for a short time and runs a validity check (credit, size, instrument) and a price check (is 1.10000 still a fair price?).
- Accept: if the checks pass, the trade is filled at 1.10000.
- Reject: if the market has moved beyond the provider’s tolerance, for example to 1.10006, the request is rejected. The client must send a new order at the new price.
Last look vs firm liquidity
| Parameter | Last look liquidity | Firm (no last look) liquidity |
|---|---|---|
| Can the provider reject at the quoted price? | Yes, within the last look window | No, a matching order is filled |
| Typical spreads | Often tighter | Often wider, to cover the provider’s risk |
| Fill certainty | Lower, rejections possible | Higher |
| Main risk for the client | Rejected orders and delays in fast markets | Higher cost per trade |
Tight spreads with last look can cost more in practice if many orders are rejected exactly when the price moves in the client’s favour. That is why reject rates and hold times matter as much as the spread.
Symmetric vs asymmetric price checks
- Symmetric check: the trade is rejected if the price has moved beyond the tolerance in either direction, whether the move favours the client or the provider.
- Asymmetric check: the trade is rejected only when the price has moved against the provider. Moves in the client’s favour are filled, moves against the provider are rejected.
- Why it matters: asymmetric checks shift market risk to the client. The FX Global Code requires providers to disclose which method they use.
FX Global Code Principle 17
The FX Global Code, published by the Global Foreign Exchange Committee (GFXC) with central-bank participation, sets out good practice for the wholesale FX market. Its Principle 17 covers last look:
- Purpose: last look should be used only as a risk control to verify validity and price.
- Transparency: providers should disclose how last look works, including how price changes in either direction affect accept or reject decisions.
- No trading on the request: since the December 2017 update, providers should not undertake trading activity that uses information from the client’s trade request during the last look window.
- Data: GFXC guidance on last look says clients should be able to receive information to evaluate how their trade requests are handled, such as hold times and reject reasons.
The Code is voluntary, but many banks, platforms and liquidity providers have signed statements of commitment to it, and some central banks expect market participants to follow it.
Last look and retail traders
Retail traders rarely see last look directly, but it affects them through their broker. An A-book broker that routes orders to providers with last look may pass on rejections as requotes, rejected orders or slippage. Last look is also one of the main tools providers use against toxic flow such as latency arbitrage: a request based on a stale quote is exactly what the price check is designed to reject. Measuring execution latency and reject rates by broker helps you see whether last look is affecting your fills.
FAQ about last look
Is last look legal?
Yes. Last look is a recognised market practice. The FX Global Code sets standards for using it fairly and transparently.
How long is the last look window?
It varies by provider, from under a millisecond to several hundred milliseconds. Providers following the FX Global Code should disclose their maximum hold times.
How can I avoid last look?
Ask your broker whether its liquidity is subject to last look, and compare spreads with reject rates. Some venues offer firm liquidity without last look, usually at a higher cost.
Risk warning: Leveraged trading in Forex and CFDs can result in losses that exceed your initial expectations. Orders can be rejected, delayed or filled at different prices, and past results do not guarantee future results. This article is for educational purposes only and is not investment advice.