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Last Look
Working definition
A practice in over-the-counter foreign exchange in which a liquidity provider, after receiving an order against its quoted price, retains a final window in which to accept or reject the trade.
In exchange-traded markets, a resting quote is firm: hit it and the trade exists. Over-the-counter FX evolved differently. Quotes streamed to clients are, in many arrangements, indicative until the liquidity provider confirms — and last look is the confirmation step, a brief hold window in which the provider may accept the order, reject it, or in some configurations requote it.
The practice has a defensible origin. In a fragmented market where a provider streams prices to many venues simultaneously, a quote can be picked off after the market has moved — by latency arbitrageurs with a faster view of the same market — and last look functions as a risk control against being systematically run over on stale prices.
The controversy is that the hold window is an option, and options have value to the holder. A provider that checks the market’s drift during the window and rejects precisely those orders where the move went against it — while filling the ones where the move went in its favour — has converted a risk control into a systematic transfer from the client. The visible symptoms are asymmetric: rejection rates that correlate with market direction during the hold, and fill quality that is worse than the quoted price would imply. Principle 17 of the FX Global Code addresses the practice directly, calling for transparency about whether and how last look is applied and restricting use of the information in the client’s order during the window.
For traders, the operative fact is that last look behaviour is measurable from execution records: rejection rates conditioned on interim market drift, hold-time distributions, and requote frequency together characterise how a counterparty actually exercises its option. The procedure for doing that from your own platform export, and the reason a record made only of fills cannot price its own rejections, is why do my forex orders get rejected. Last look is one of the mechanisms by which realised slippage detaches from displayed prices, and it belongs in any honest accounting of execution cost.
Commonly confused with
Neighbouring concepts that get used interchangeably, and the distinction that actually separates them.
- Requote
A requote is one of the outcomes the last look window can produce, not a synonym for it. Last look is the hold itself — the interval in which the provider decides whether your order becomes a trade at all. A requote is what you see when that decision comes back as "not at that price".
- Quote fade
Quote fade happens before you commit: the price you were looking at withdraws as you reach for it. Last look happens after: you have sent an order against a price, and the provider still holds the option to decline it. One is a quote that left; the other is an order that was held.
- Slippage
Last look is a mechanism; slippage is one of the outcomes it can produce. Conflating them makes the mechanism invisible — a desk that only measures realised slippage will see the cost of rejected and repriced orders as ordinary market movement rather than as the exercise of an option held by its counterparty.
- Latency arbitrage
Latency arbitrage is the behaviour last look was designed to defend against: picking off a stale quote using a faster view of the same market. The two are opposite sides of the same speed asymmetry, which is why the practice has a defensible origin and a contested application at the same time.
How to measure it in your own data
A definition you cannot test is a definition you have to take on trust. This is the shortest honest route from the concept to a number you computed yourself.
- Records you need
Execution records that retain rejected orders, not only filled ones — order timestamp, the quoted price, the accept-or-reject outcome, the hold duration, and a reference price for the market during the hold. A record that keeps only fills cannot answer this question at all, which is itself worth knowing about your own data.
- What you compute
Rejection rate conditioned on which way the market drifted during the hold window; the distribution of hold times; and requote frequency alongside both. The conditioning is the whole exercise — an unconditional rejection rate tells you almost nothing.
- What the answer tells you
If rejections are spread evenly across drift direction, the window is behaving as the risk control it is described as. If rejections concentrate in the cases where the interim move went against the provider, while the cases that went in its favour are filled, the option is being exercised in one direction. That pattern is what the FX Global Code's transparency provisions exist to make discussable.
If this has already cost you
Rejection rates conditioned on interim drift, and hold-time distributions, come out of execution records that retain rejected attempts.
- Feed Fidelity Assay“Is the feed my terminal shows me behaving consistently?”Will not establish: A verdict on your broker. One exported log from one terminal measures your feed as you received it — venue-side behaviour, other account tiers and intent are all outside what this data can carry.
- Execution-Chain Attribution“Was it the EA, the connection, or the broker?”Will not establish: Fault. The chain attribution shows where the divergence entered, not who owes you for it — a wide fill can be an honest market, a slow hop can be your own VPS, and the report distinguishes what the logs prove from what they merely suggest.
Intake is not open yet, so none of these can be commissioned today. They are listed here so you know the measurement exists and what it would and would not settle — the launch list hears first.
Questions and answers
Is last look illegal?
No. It is a disclosed practice in much of over-the-counter FX, and Principle 17 of the FX Global Code addresses it through transparency rather than prohibition — calling for clarity about whether and how last look is applied, and restricting use of the information in a client's order during the window. The question for a trader is not whether it is permitted but how their particular counterparty exercises it.
Why does last look exist at all?
Because a provider streaming prices to many venues at once can be picked off on a quote the market has already moved past, by someone with a faster view of that same market. The hold window is a defence against being systematically run over on stale prices. The origin is genuinely defensible; the contested part is what happens when a risk control is also an option with value to whoever holds it.
How would I know whether last look is being applied to me?
Your counterparty's disclosures are the first place to look, and under the Global Code they are meant to tell you. After that it is measurable from your own execution records, provided those records retain rejections — rejection rates conditioned on interim market drift, hold-time distributions and requote frequency together characterise how the option is actually being used.
Does last look show up in exchange-traded markets?
Not in the same form. On an exchange a resting quote is firm: hit it and the trade exists. Last look is a feature of the over-the-counter structure, where streamed quotes are in many arrangements indicative until the provider confirms.
Related terms
Derived from the links this entry makes and the entries that link back to it.
In the research
Last Look comes up in four research notes on this site, and this entry lists three of them.