By getting last look the broker is able to often negotiate more favourable terms from its LPs. Marketmaking on these venues is highly profitable. I think these microstructure battles will be won by who ever is the most valuable client-segment to the venue in question. All the benefits of Digital plus: The resulting risk to banks of greater losses across the market only increased their desire to embed Last Look into their operations. Make informed decisions with the FT.
What is last look in Forex. You may have heard the term ‘last look’ being mentioned by traders and been confused as to what is meant by this term. Last Look simply refers to the ability that liquidity providers have to reject an order even when the order matches the liquidity provider quoted price.
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HFT knew much quicker that prices had changed and seeked out any quotes from banks that were still quoting the older price. These HFT firms hit the lagging quotes and immediately sold them to the market for a risk free profit.
This is also known as latency arbitrage. Because it would take awhile for the technology of banks to catch up to HFTs, the banks needed a solution to combat these HFTs. As you can already guess, the last look prevents the HFTs from taking advantage of their lagging quotes, by simply rejecting the order. For those who do not already know, LMAX was established with a vision of bringing exchange style like equities and futures trading trading to Forex.
LMAX focuses primarily on institutional clients, but they do accept retail clients as well. Despite their no last look feed, I would say their spreads are very competitive still. You can view their live spreads below. Whether no last look trading in spot Forex will become the industry standard remains to be seen. What is certain is that with a no last look broker, the price you hit will certainly be the price you get. Best of luck to your trading! How to avoid or minimize slippage in Forex trading Abundance Trading Group.
Your email address will not be published. What is Last Look in Forex? Real life example of last look Here is a real life example of last look in action. Stay informed and spot emerging risks and opportunities with independent global reporting, expert commentary and analysis you can trust.
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What is ‘Last Look’ in Online FX Trading?
Last look in Forex is simply the ability for the liquidity provider filling your trade to reject your order, although you might already have hit his price. For example, liquidity provider A (LP A) places a BUY limit order at for EURUSD for 10 lots. Two of the world’s biggest currency-trading platforms plan to restrict a controversial industry practice in which banks can pull out of trades at the last moment if the market moves against them. To its supporters, last look is an important tool for preventing prices from being moved by high-speed traders just before trades are executed, while still allowing market makers to maintain tight.