Last Look Changes What a Quoted Spread Means

A tight displayed FX spread is not the full execution promise when a venue uses “last look.” The liquidity provider may conduct a final price or validity check after receiving a trade request, so traders must assess rejection rules and response time alongside the bid and ask.

The FX Global Code, last updated in December 2024, sets good-practice principles for the wholesale market. Its examples say a market participant should not use information from a client's trade request to change prices during the last-look window. Pricing can continue to update only when those updates are independent of the request. The Code supplements law and regulation; it is not itself a legal rulebook.

Last look exists because electronic prices can become stale before a trade reaches the liquidity provider. A validity check can protect against latency arbitrage and obvious off-market execution. The same mechanism can create uncertainty for a client if the reason for rejection, timing and use of trade information are not transparent.

Four questions behind the spread

Is the quote firm, indicative or subject to last look？
How long is the checking window under normal conditions？
What conditions permit rejection or price change？
Does order-routing logic include rebates or other preferences？

Outcome	Displayed quote	Final result
Accepted	Bid/ask observed	Trade fills as requested
Rejected	Quote looked competitive	No position is created
Slipped under disclosed rules	Market moved	Fill differs from request
Partial fill	Size was limited	Remaining order stays open or cancels

The table does not imply that every venue offers all four outcomes. It shows why spread measurement without execution statistics is incomplete. A provider with a slightly wider firm quote can deliver a lower realized cost than a narrow quote with frequent rejection.

How a client can test the policy

Request the execution-policy disclosure, then measure acceptance, fill time and slippage by pair and session. Separate market orders from limit orders and small trades from large ones. Averages can hide the exact conditions that matter to the strategy.

The opening claim now has an operational answer: a quoted spread is useful only when the trader knows how the quote becomes a completed trade.

This general bid-and-ask lesson explains the visible two-price structure. The FX Global Code is the relevant source for last-look conduct and disclosure principles.