FX markets and Last Look

In eFX spot markets “last look” is the name given to a window of time where the market-maker has the option to reject the trade. It is a controversial topic and one highlighted within the FX code of conduct.
There are pros and cons to the usage of last look:


  • Allows liquidity providers to display greater liquidity on each venue.
  • Allows generally tighter bid/ask spreads on each venue.
  • Protects markets from liquidity arbitrageurs who may cause wider spreads for all market paricipants.
  • Allows top of book prices to be more stable (lower update frequency).


  • Liquidity takers have no certainty of fill.
  • Liquidity takers need to return to market after a period of time where they are exposed to market movements.
  • Trades are more likely to be rejected in volatile markets.
  • Liquidity takers need clarity over why a trade has been rejected and assurances that the information about the trade has not been misused.

Academic Paper 

In this paper, Jamie Walton with his co-authors quantify the cost of the last look option and suggest the reduction in spreads that may result as a result of last look liquidity.

Last look (pdf)