# What Are the Primary Arguments for and against the Use of Last Look in RFQ Markets? ▴ Question

**Published:** 2025-08-06
**Categories:** Question

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## Concept

The debate surrounding the use of “[last look](https://prime.greeks.live/area/last-look/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite)” in Request for Quote (RFQ) markets is a direct consequence of the evolution of electronic trading. At its core, the conversation is about risk management, information symmetry, and the fundamental structure of market fairness. To understand the arguments, one must first view the RFQ and last look mechanisms as components within a larger system of liquidity provision and price discovery. An RFQ is a bilateral communication protocol.

A [liquidity consumer](https://prime.greeks.live/area/liquidity-consumer/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) initiates this process by soliciting quotes from a select group of [liquidity providers](https://prime.greeks.live/area/liquidity-providers/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) for a specified asset and quantity. This is a discrete, targeted inquiry, distinct from the open, all-to-all nature of a central limit order book. Last look enters the process as a final risk checkpoint for the liquidity provider. After a liquidity consumer agrees to a quoted price, the provider is granted a brief window ▴ the last look ▴ to either accept or reject the trade request. This mechanism originated as a safeguard against latency arbitrage, where a fast trader could exploit a stale price before the market maker could update it.

From a systems architecture perspective, last look functions as an optionality layer embedded within the trade execution workflow. The [liquidity provider](https://prime.greeks.live/area/liquidity-provider/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite), in essence, retains a final execution option. This option has tangible value and reallocates a specific set of risks. The liquidity consumer, upon receiving a quote, has the option to trade.

When they exercise this option by sending a [trade request](https://prime.greeks.live/question/what-are-the-core-differences-between-a-request-for-quote-and-a-request-for-market/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite), the last look feature grants the liquidity provider a subsequent option to withdraw from the transaction. This introduces a critical element of [execution uncertainty](https://prime.greeks.live/area/execution-uncertainty/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) for the liquidity consumer, a factor that is central to the arguments against its use. The entire protocol operates in a fragmented, high-speed environment where information and technology disparities can create significant economic advantages. Therefore, the validity of last look hinges on how it is used ▴ as a defensive risk control or as a tool for profit generation at the expense of the client.

> Last look is a mechanism in electronic trading, particularly in FX and some bond markets, that gives a liquidity provider a final opportunity to reject a trade request after the client has accepted the quoted price.

The core tension arises from the information asymmetry inherent in the RFQ process itself. When a client requests a quote, they signal their trading intention to a select group of providers. This signal, even without revealing the direction (buy or sell), is valuable information.

The controversy intensifies when a trade is rejected using last look, as the client has revealed their intention without achieving execution, while the liquidity provider has gained market intelligence. This dynamic is particularly pronounced in markets like [foreign exchange](https://prime.greeks.live/area/foreign-exchange/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) (FX), where the practice is widespread and has been the subject of intense scrutiny and regulatory guidance, such as that from the [Global Foreign Exchange Committee](https://prime.greeks.live/area/global-foreign-exchange-committee/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) (GFXC).

![Dark, pointed instruments intersect, bisected by a luminous stream, against angular planes. This embodies institutional RFQ protocol driving cross-asset execution of digital asset derivatives](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-best-execution-system-architecture.jpg)

![A curved grey surface anchors a translucent blue disk, pierced by a sharp green financial instrument and two silver stylus elements. This visualizes a precise RFQ protocol for institutional digital asset derivatives, enabling liquidity aggregation, high-fidelity execution, price discovery, and algorithmic trading within market microstructure via a Principal's operational framework](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-high-fidelity-execution-via-rfq-protocols-optimizing-market-microstructure-and-price-discovery.jpg)

## Strategy

Analyzing the strategic implications of last look requires a dual perspective, examining the distinct objectives of the liquidity provider (LP) and the liquidity consumer (LC). For the LP, the primary strategic function of last look is risk mitigation. In a fragmented market with multiple trading venues and varying data feed speeds, LPs face the constant risk of being “picked off” by trading on stale quotes.

Last look acts as a final validation check against their current internal pricing model and available credit, providing a crucial defense against [latency arbitrage](https://prime.greeks.live/area/latency-arbitrage/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite). This protection mechanism allows LPs to quote more aggressively and provide tighter spreads than they might otherwise, theoretically benefiting the entire market by enhancing liquidity.

![Two distinct components, beige and green, are securely joined by a polished blue metallic element. This embodies a high-fidelity RFQ protocol for institutional digital asset derivatives, ensuring atomic settlement and optimal liquidity](https://options.greeks.live/wp-content/uploads/2025/07/institutional-rfq-protocol-for-digital-asset-derivatives-high-fidelity-link.jpg)

## Arguments for Last Look

From the perspective of the market maker, the arguments supporting the use of last look are grounded in the practical realities of providing liquidity in high-speed electronic markets.

- **Risk Control** ▴ The primary and most legitimate argument is that last look serves as a vital risk management tool. It allows the LP to conduct final price and validity checks before confirming a trade, protecting them from latency arbitrage and technology failures. Without this final check, LPs would have to widen their spreads to compensate for this risk, leading to worse prices for all market participants.

- **Increased Liquidity** ▴ Proponents argue that the safety provided by last look encourages more participants to act as liquidity providers. This includes non-bank LPs who may have less sophisticated infrastructure than large banks. The result is a deeper, more competitive market with more available liquidity.

- **Prevention of Stale Pricing** ▴ In a decentralized market like FX, there is no single source of truth for pricing. Last look ensures that the execution price is aligned with the current market at the moment of the trade, preventing transactions on outdated prices.

![A deconstructed mechanical system with segmented components, revealing intricate gears and polished shafts, symbolizing the transparent, modular architecture of an institutional digital asset derivatives trading platform. This illustrates multi-leg spread execution, RFQ protocols, and atomic settlement processes](https://options.greeks.live/wp-content/uploads/2025/07/deconstructed-principal-trading-system-revealing-core-mechanics-of-digital-asset-derivatives-execution.jpg)

## Arguments against Last Look

Conversely, liquidity consumers and market fairness advocates present a strong case against the practice, focusing on execution uncertainty, [information leakage](https://prime.greeks.live/area/information-leakage/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite), and the potential for misuse.

- **Execution Uncertainty** ▴ The most significant drawback for the LC is the uncertainty of execution. A rejected trade means the LC must restart the RFQ process, by which time the market may have moved against them. This “rejection risk” complicates trading strategies and can increase overall execution costs.

- **Information Leakage** ▴ When an LC sends an RFQ, they reveal their trading interest. If the trade is rejected, the LP has gained valuable information about the LC’s intentions without taking on any risk. This information can be used to the LP’s advantage, a practice that is a major concern for investors.

- **Potential for Unfair Practices** ▴ Critics argue that last look can be used for reasons other than legitimate risk control. An LP could reject trades that would be unprofitable (due to market movement during the last look window) while accepting those that have become profitable. This asymmetric application, often referred to as “free optionality,” is a form of market abuse. Regulators have taken a dim view of firms that lack transparency about how they apply last look.

> The strategic debate over last look balances the liquidity provider’s need for risk mitigation against the liquidity consumer’s requirement for certain and fair execution.

![Two sleek, pointed objects intersect centrally, forming an 'X' against a dual-tone black and teal background. This embodies the high-fidelity execution of institutional digital asset derivatives via RFQ protocols, facilitating optimal price discovery and efficient cross-asset trading within a robust Prime RFQ, minimizing slippage and adverse selection](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-prime-os-microstructure.jpg)

## What Is the Role of Transparency in Mitigating Last Look Risks?

A central theme in the evolution of last look has been the push for greater transparency. Market participants and regulators agree that if last look is to be used, it must be done so transparently. LPs are now encouraged, and in some contexts required, to provide clear disclosures to their clients. These disclosures should detail how the last look process works, including the length of the hold time and the specific criteria for rejecting a trade.

For the liquidity consumer, this transparency allows for more informed decisions when selecting counterparties. By analyzing [rejection rates](https://prime.greeks.live/area/rejection-rates/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) and execution data, LCs can identify which LPs use last look fairly and which may be using it to their own advantage.

The table below outlines the strategic considerations for both liquidity providers and consumers in a market where last look is prevalent.

### Strategic Considerations in Last Look Markets

| Participant | Primary Objective | Arguments For Last Look | Arguments Against Last Look | Mitigation Strategy |
| --- | --- | --- | --- | --- |
| Liquidity Provider | Profitable Market Making | Mitigates latency arbitrage risk; allows for tighter quoting. | Can damage client relationships if perceived as unfair. | Provide clear, detailed disclosures on last look policies. |
| Liquidity Consumer | Best Execution | May lead to better pricing due to increased competition. | Creates execution uncertainty and information leakage risk. | Use Transaction Cost Analysis (TCA) to monitor reject rates and execution quality. |

![Two spheres balance on a fragmented structure against split dark and light backgrounds. This models institutional digital asset derivatives RFQ protocols, depicting market microstructure, price discovery, and liquidity aggregation](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocols-price-discovery-liquidity-aggregation.jpg)

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## Execution

From an execution standpoint, navigating [RFQ markets](https://prime.greeks.live/area/rfq-markets/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) with last look requires a sophisticated approach to data analysis and counterparty management. The theoretical arguments for and against the practice translate into tangible costs and benefits that can be measured and managed. For an institutional trader, the ultimate goal is to achieve “[best execution](https://prime.greeks.live/area/best-execution/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite),” a concept that encompasses not just the price of the trade but also the certainty and timeliness of its execution.

Last look directly impacts this calculus. The key is to move from a subjective assessment of the practice to a quantitative one, using data to build a robust execution framework.

![Close-up reveals robust metallic components of an institutional-grade execution management system. Precision-engineered surfaces and central pivot signify high-fidelity execution for digital asset derivatives](https://options.greeks.live/wp-content/uploads/2025/07/institutional-grade-digital-asset-derivatives-rfq-execution-precision-optimizing-market-microstructure-for-best-execution-and-prime-os.jpg)

## Quantitative Analysis of Execution Quality

A modern execution desk must employ [Transaction Cost Analysis](https://prime.greeks.live/area/transaction-cost-analysis/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) (TCA) to dissect the impact of last look. This involves capturing and analyzing high-precision timestamp data for every stage of the RFQ workflow. The critical metrics to monitor include:

- **Rejection Rates** ▴ This is the most direct measure of last look’s impact. Traders should track rejection rates by counterparty, currency pair, trade size, and market volatility. Consistently high rejection rates from a specific LP are a clear red flag.

- **Hold Time Duration** ▴ This measures the length of the last look window. Longer hold times expose the LC to greater market risk and provide more opportunity for the LP to act on price movements. The [FX Global Code](https://prime.greeks.live/area/fx-global-code/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) states that these hold times should be as short as possible.

- **Post-Rejection Market Impact** ▴ This analyzes how the market moves immediately after a trade is rejected. If there is a consistent pattern of the market moving in the LP’s favor after a rejection, it could be indicative of the LP using the information gleaned from the trade request.

> Effective execution in last look environments depends on rigorous, data-driven analysis of counterparty behavior to minimize rejection risk and information leakage.

![A sleek, balanced system with a luminous blue sphere, symbolizing an intelligence layer and aggregated liquidity pool. Intersecting structures represent multi-leg spread execution and optimized RFQ protocol pathways, ensuring high-fidelity execution and capital efficiency for institutional digital asset derivatives on a Prime RFQ](https://options.greeks.live/wp-content/uploads/2025/07/digital-asset-derivatives-rfq-engine-for-institutional-execution.jpg)

## How Does Last Look Affect Different Market Environments?

The impact of last look is not uniform; it varies significantly with market conditions. During periods of high volatility, LPs are more likely to use last look to protect themselves from rapid price changes. An LC might see rejection rates spike during major economic news releases. Understanding this dynamic allows traders to adjust their execution strategies, perhaps by avoiding RFQs to certain counterparties during volatile periods or by using algorithms that route orders to venues with no-last-look policies.

The table below provides a simplified example of a counterparty scorecard that a trading desk might use to evaluate the [execution quality](https://prime.greeks.live/area/execution-quality/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) of different liquidity providers in a last look environment.

### Counterparty Execution Quality Scorecard

| Liquidity Provider | Average Hold Time (ms) | Rejection Rate (Overall) | Rejection Rate (Volatile Mkts) | Price Improvement Offered | Execution Quality Score |
| --- | --- | --- | --- | --- | --- |
| Bank A | 15 | 1.5% | 4.0% | No | Good |
| Bank B | 50 | 4.5% | 12.0% | No | Poor |
| Non-Bank C | 20 | 2.0% | 5.5% | Yes (Symmetric) | Excellent |
| Platform D | 5 | 0.1% (No Last Look) | 0.1% (No Last Look) | N/A | Excellent |

Ultimately, the execution strategy comes down to a trade-off. A trader might choose to transact with an LP that has a higher rejection rate if that LP consistently offers the tightest spreads. However, this decision must be informed by data.

By quantifying the cost of rejections and market impact, the trader can determine the true “all-in” cost of trading with each counterparty. This analytical approach transforms the debate over last look from a philosophical one into a solvable optimization problem, allowing institutions to build an execution policy that systematically maximizes their probability of achieving best execution.

![A precision optical system with a teal-hued lens and integrated control module symbolizes institutional-grade digital asset derivatives infrastructure. It facilitates RFQ protocols for high-fidelity execution, price discovery within market microstructure, algorithmic liquidity provision, and portfolio margin optimization via Prime RFQ](https://options.greeks.live/wp-content/uploads/2025/08/principal-grade-digital-asset-derivatives-rfq-optics-for-high-fidelity-execution-and-optimized-liquidity.jpg)

## References

- Norges Bank Investment Management. “THE ROLE OF LAST LOOK IN FOREIGN EXCHANGE MARKETS.” 17 December 2015.

- Global Foreign Exchange Committee. “Execution Principles Working Group Report on Last Look.” August 2021.

- Schmerken, Ivy. “A Hard Look at Last Look in Foreign Exchange.” FlexTrade, 17 February 2016.

- U.S. Securities and Exchange Commission. “Preliminary Recommendations Regarding the Use of Last-Look.” Fixed Income Market Structure Advisory Committee, 2019.

- The Investment Association. “IA POSITION PAPER ON LAST LOOK.” 2017.

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## Reflection

![Two robust, intersecting structural beams, beige and teal, form an 'X' against a dark, gradient backdrop with a partial white sphere. This visualizes institutional digital asset derivatives RFQ and block trade execution, ensuring high-fidelity execution and capital efficiency through Prime RFQ FIX Protocol integration for atomic settlement](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-optimized-execution.jpg)

## Calibrating Your Execution Framework

The analysis of last look reveals a fundamental truth about modern market structure ▴ execution is a dynamic challenge of risk allocation. The presence of mechanisms like last look necessitates a proactive and data-centric operational posture. It compels an institution to look inward and assess the sophistication of its own systems. Is your execution protocol built on a foundation of hope, relying on the goodwill of counterparties?

Or is it architected with the tools to quantitatively measure, analyze, and ultimately dictate the terms of your market access? The knowledge of how last look functions is merely the first layer. The decisive edge is found in constructing an internal system of intelligence that transforms market structure debates into actionable, quantitative strategies, ensuring your firm is not just a participant in the market, but a master of its own execution.

![A central control knob on a metallic platform, bisected by sharp reflective lines, embodies an institutional RFQ protocol. This depicts intricate market microstructure, enabling high-fidelity execution, precise price discovery for multi-leg options, and robust Prime RFQ deployment, optimizing latent liquidity across digital asset derivatives](https://options.greeks.live/wp-content/uploads/2025/08/institutional-rfq-digital-asset-derivatives-execution-engine-core-microstructure.jpg)

## Glossary

<a href="https://prime.greeks.live/area/last-look/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![Two semi-transparent, curved elements, one blueish, one greenish, are centrally connected, symbolizing dynamic institutional RFQ protocols. This configuration suggests aggregated liquidity pools and multi-leg spread constructions](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-price-discovery-engine.jpg)

## Last Look

Meaning ▴ Last Look refers to a specific latency window afforded to a liquidity provider, typically in electronic over-the-counter markets, enabling a final review of an incoming client order against real-time market conditions before committing to execution. </a><a href="https://prime.greeks.live/area/liquidity-providers/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![Sleek, speckled metallic fin extends from a layered base towards a light teal sphere. This depicts Prime RFQ facilitating digital asset derivatives trading](https://options.greeks.live/wp-content/uploads/2025/07/prime-os-digital-asset-derivatives-rfq-high-fidelity-execution-intelligence.jpg)

## Liquidity Providers

Meaning ▴ Liquidity Providers are market participants, typically institutional entities or sophisticated trading firms, that facilitate efficient market operations by continuously quoting bid and offer prices for financial instruments. </a><a href="https://prime.greeks.live/area/liquidity-consumer/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![Curved, segmented surfaces in blue, beige, and teal, with a transparent cylindrical element against a dark background. This abstractly depicts volatility surfaces and market microstructure, facilitating high-fidelity execution via RFQ protocols for digital asset derivatives, enabling price discovery and revealing latent liquidity for institutional trading](https://options.greeks.live/wp-content/uploads/2025/07/optimized-rfq-protocol-dynamics-for-institutional-crypto-derivatives.jpg)

## Liquidity Consumer

Meaning ▴ A liquidity consumer is an order type or execution algorithm designed to immediately execute against existing liquidity on an order book, thereby removing resting orders and consuming available depth. </a><a href="https://prime.greeks.live/area/liquidity-provider/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![Parallel marked channels depict granular market microstructure across diverse institutional liquidity pools. A glowing cyan ring highlights an active Request for Quote RFQ for precise price discovery](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-high-fidelity-execution-3.jpg)

## Liquidity Provider

Meaning ▴ A Liquidity Provider is an entity, typically an institutional firm or professional trading desk, that actively facilitates market efficiency by continuously quoting two-sided prices, both bid and ask, for financial instruments. </a><a href="https://prime.greeks.live/area/execution-uncertainty/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A complex, multi-faceted crystalline object rests on a dark, reflective base against a black background. This abstract visual represents the intricate market microstructure of institutional digital asset derivatives](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-prime-os-execution-architecture.jpg)

## Execution Uncertainty

Meaning ▴ Execution Uncertainty defines the inherent variability in achieving a predicted or desired transaction outcome for a digital asset derivative order, encompassing deviations from the anticipated price, timing, or quantity due to dynamic market conditions. </a><a href="https://prime.greeks.live/question/what-are-the-core-differences-between-a-request-for-quote-and-a-request-for-market/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A translucent, faceted sphere, representing a digital asset derivative block trade, traverses a precision-engineered track. This signifies high-fidelity execution via an RFQ protocol, optimizing liquidity aggregation, price discovery, and capital efficiency within institutional market microstructure](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-block-trade-high-fidelity-execution-protocol-prime-os-path.jpg)

## Trade Request

An RFQ sources discreet, competitive quotes from select dealers, while an RFM engages the continuous, anonymous, public order book. </a><a href="https://prime.greeks.live/area/global-foreign-exchange-committee/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A polished, light surface interfaces with a darker, contoured form on black. This signifies the RFQ protocol for institutional digital asset derivatives, embodying price discovery and high-fidelity execution](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-interface.jpg)

## Global Foreign Exchange Committee

Meaning ▴ The Global Foreign Exchange Committee (GFXC) represents a collective of central banks and private sector market participants from foreign exchange committees across the globe, operating as a standing forum to promote the development and implementation of the Global FX Code of Conduct. </a><a href="https://prime.greeks.live/area/foreign-exchange/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A dark, sleek, disc-shaped object features a central glossy black sphere with concentric green rings. This precise interface symbolizes an Institutional Digital Asset Derivatives Prime RFQ, optimizing RFQ protocols for high-fidelity execution, atomic settlement, capital efficiency, and best execution within market microstructure](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-execution-protocol-control-system.jpg)

## Foreign Exchange

Meaning ▴ Foreign Exchange, or FX, designates the global, decentralized market where currencies are traded. </a><a href="https://prime.greeks.live/area/latency-arbitrage/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A smooth, off-white sphere rests within a meticulously engineered digital asset derivatives RFQ platform, featuring distinct teal and dark blue metallic components. This sophisticated market microstructure enables private quotation, high-fidelity execution, and optimized price discovery for institutional block trades, ensuring capital efficiency and best execution](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-system-microstructure-core.jpg)

## Latency Arbitrage

Meaning ▴ Latency arbitrage is a high-frequency trading strategy designed to profit from transient price discrepancies across distinct trading venues or data feeds by exploiting minute differences in information propagation speed. </a><a href="https://prime.greeks.live/area/information-leakage/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A multi-faceted crystalline form with sharp, radiating elements centers on a dark sphere, symbolizing complex market microstructure. This represents sophisticated RFQ protocols, aggregated inquiry, and high-fidelity execution across diverse liquidity pools, optimizing capital efficiency for institutional digital asset derivatives within a Prime RFQ](https://options.greeks.live/wp-content/uploads/2025/07/rfq-protocols-for-institutional-digital-asset-derivatives-price-discovery.jpg)

## Information Leakage

Meaning ▴ Information leakage denotes the unintended or unauthorized disclosure of sensitive trading data, often concerning an institution's pending orders, strategic positions, or execution intentions, to external market participants. </a><a href="https://prime.greeks.live/area/rejection-rates/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A sleek, domed control module, light green to deep blue, on a textured grey base, signifies precision. This represents a Principal's Prime RFQ for institutional digital asset derivatives, enabling high-fidelity execution via RFQ protocols, optimizing price discovery, and enhancing capital efficiency within market microstructure](https://options.greeks.live/wp-content/uploads/2025/07/precision-control-for-institutional-digital-asset-rfq-execution.jpg)

## Rejection Rates

Meaning ▴ Rejection Rates quantify the proportion of order messages or trading instructions that a trading system, execution venue, or counterparty declines relative to the total number of submissions within a defined period. </a><a href="https://prime.greeks.live/area/best-execution/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A polished glass sphere reflecting diagonal beige, black, and cyan bands, rests on a metallic base against a dark background. This embodies RFQ-driven Price Discovery and High-Fidelity Execution for Digital Asset Derivatives, optimizing Market Microstructure and mitigating Counterparty Risk via Prime RFQ Private Quotation](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-best-execution-protocol.jpg)

## Best Execution

Meaning ▴ Best Execution is the obligation to obtain the most favorable terms reasonably available for a client's order. </a><a href="https://prime.greeks.live/area/rfq-markets/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![Sharp, intersecting geometric planes in teal, deep blue, and beige form a precise, pointed leading edge against darkness. This signifies High-Fidelity Execution for Institutional Digital Asset Derivatives, reflecting complex Market Microstructure and Price Discovery](https://options.greeks.live/wp-content/uploads/2025/07/high-fidelity-digital-asset-derivatives-rfq-market-microstructure-2.jpg)

## Rfq Markets

Meaning ▴ RFQ Markets represent a structured, bilateral negotiation mechanism within institutional trading, facilitating the Request for Quote process where a Principal solicits competitive, executable bids and offers for a specified digital asset or derivative from a select group of liquidity providers. </a><a href="https://prime.greeks.live/area/transaction-cost-analysis/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![Four sleek, rounded, modular components stack, symbolizing a multi-layered institutional digital asset derivatives trading system. Each unit represents a critical Prime RFQ layer, facilitating high-fidelity execution, aggregated inquiry, and sophisticated market microstructure for optimal price discovery via RFQ protocols](https://options.greeks.live/wp-content/uploads/2025/07/modular-institutional-crypto-derivatives-trading-system-components.jpg)

## Transaction Cost Analysis

Meaning ▴ Transaction Cost Analysis (TCA) is the quantitative methodology for assessing the explicit and implicit costs incurred during the execution of financial trades. </a><a href="https://prime.greeks.live/area/fx-global-code/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![Interconnected modular components with luminous teal-blue channels converge diagonally, symbolizing advanced RFQ protocols for institutional digital asset derivatives. This depicts high-fidelity execution, price discovery, and aggregated liquidity across complex market microstructure, emphasizing atomic settlement, capital efficiency, and a robust Prime RFQ](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-execution-microstructure-protocols.jpg)

## Fx Global Code

Meaning ▴ The FX Global Code represents a comprehensive set of global principles of good practice for the wholesale foreign exchange market. </a><a href="https://prime.greeks.live/area/execution-quality/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![Two intersecting metallic structures form a precise 'X', symbolizing RFQ protocols and algorithmic execution in institutional digital asset derivatives. This represents market microstructure optimization, enabling high-fidelity execution of block trades with atomic settlement for capital efficiency via a Prime RFQ](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocols-market-microstructure-execution.jpg)

## Execution Quality

Meaning ▴ Execution Quality quantifies the efficacy of an order's fill, assessing how closely the achieved trade price aligns with the prevailing market price at submission, alongside consideration for speed, cost, and market impact. </a>

**Tags:** [Price Improvement](https://options.greeks.live/area/price-improvement/), [Liquidity Providers](https://options.greeks.live/area/liquidity-providers/), [Transaction Cost Analysis](https://options.greeks.live/area/transaction-cost-analysis/), [Latency Arbitrage](https://options.greeks.live/area/latency-arbitrage/), [Liquidity Provider](https://options.greeks.live/area/liquidity-provider/), [RFQ Markets](https://options.greeks.live/area/rfq-markets/)	

## Discover More

- 
### [How Does the Skewness of a Slippage Distribution Serve as a Key Indicator of Asymmetric Last Look?](https://options.greeks.live/question/how-does-the-skewness-of-a-slippage-distribution-serve-as-a-key-indicator-of-asymmetric-last-look/)
![Sleek, modular system component in beige and dark blue, featuring precise ports and a vibrant teal indicator. This embodies Prime RFQ architecture enabling high-fidelity execution of digital asset derivatives through bilateral RFQ protocols, ensuring low-latency interconnects, private quotation, institutional-grade liquidity, and atomic settlement.](https://options.greeks.live/wp-content/uploads/2025/07/prime-os-rfq-system-interface-for-digital-asset-derivatives-execution.jpg)

Slippage distribution skewness quantifies the economic cost of an LP's risk protocol, revealing the degree of asymmetry in their execution.

- 
### [How Does Relationship Capital Quantitatively Impact Rfq Execution Quality?](https://options.greeks.live/question/how-does-relationship-capital-quantitatively-impact-rfq-execution-quality/)
![Interconnected teal and beige geometric facets form an abstract construct, embodying a sophisticated RFQ protocol for institutional digital asset derivatives. This visualizes multi-leg spread structuring, liquidity aggregation, high-fidelity execution, principal risk management, capital efficiency, and atomic settlement.](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-for-multi-leg-spread-execution-and-optimal-liquidity-aggregation.jpg)

Relationship capital directly translates to quantifiable execution quality by reducing an LP's perceived adverse selection risk.

- 
### [How Does Last Look Impact Overall Transaction Costs for an Institutional Investor?](https://options.greeks.live/question/how-does-last-look-impact-overall-transaction-costs-for-an-institutional-investor/)
![A conceptual image illustrates a sophisticated RFQ protocol engine, depicting the market microstructure of institutional digital asset derivatives. Two semi-spheres, one light grey and one teal, represent distinct liquidity pools or counterparties within a Prime RFQ, connected by a complex execution management system for high-fidelity execution and atomic settlement of Bitcoin options or Ethereum futures.](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-market-microstructure-2.jpg)

Last look introduces an LP option that increases an investor's transaction costs via rejections and information leakage.

- 
### [What Are the Main Differences between Last Look and Firm Pricing in RFQ Systems?](https://options.greeks.live/question/what-are-the-main-differences-between-last-look-and-firm-pricing-in-rfq-systems/)
![The abstract image features angular, parallel metallic and colored planes, suggesting structured market microstructure for digital asset derivatives. A spherical element represents a block trade or RFQ protocol inquiry, reflecting dynamic implied volatility and price discovery within a dark pool. This visualizes high-fidelity execution pathways for principal's capital, minimizing slippage and optimizing capital efficiency.](https://options.greeks.live/wp-content/uploads/2025/07/optimized-institutional-digital-asset-derivatives-rfq-protocol-framework-ensuring-principal-best-execution-and-latent-liquidity-capture.jpg)

Last look offers potentially tighter quotes by granting providers a final rejection option, while firm pricing guarantees execution at a stated price.

- 
### [How Can an Institutional Trading Desk Architect an Ems to Systematically Mitigate Last Look Rejection Costs?](https://options.greeks.live/question/how-can-an-institutional-trading-desk-architect-an-ems-to-systematically-mitigate-last-look-rejection-costs/)
![A central translucent disk, representing a Liquidity Pool or RFQ Hub, is intersected by a precision Execution Engine bar. Its core, an Intelligence Layer, signifies dynamic Price Discovery and Algorithmic Trading logic for Digital Asset Derivatives. Surrounding elements denote Market Microstructure and High-Fidelity Execution pathways for Block Trades, ensuring Best Execution within a Prime RFQ framework.](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-engine-visualizing-microstructure.jpg)

An institutional EMS mitigates last look costs by architecting a data-driven liquidity provider scoring and dynamic routing system.

- 
### [Can Transaction Cost Analysis Truly Capture All the Hidden Costs Associated with Last Look Liquidity Practices?](https://options.greeks.live/question/can-transaction-cost-analysis-truly-capture-all-the-hidden-costs-associated-with-last-look-liquidity-practices/)
![A central concentric ring structure, representing a Prime RFQ hub, processes RFQ protocols. Radiating translucent geometric shapes, symbolizing block trades and multi-leg spreads, illustrate liquidity aggregation for digital asset derivatives. Sharp angular elements highlight high-fidelity execution and price discovery in market microstructure.](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-execution-engine-4.jpg)

Standard TCA fails to capture last look's hidden costs, which arise from information leakage and the opportunity cost of rejected trades.

- 
### [What Are the Regulatory Implications of High Last Look Rejection Rates for Liquidity Providers?](https://options.greeks.live/question/what-are-the-regulatory-implications-of-high-last-look-rejection-rates-for-liquidity-providers/)
![Abstract geometric design illustrating a central RFQ aggregation hub for institutional digital asset derivatives. Radiating lines symbolize high-fidelity execution via smart order routing across dark pools. Modular elements represent atomic settlement and capital efficiency within a Principal's operational framework.](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-high-fidelity-execution-architecture.jpg)

High last look rejection rates trigger regulatory scrutiny as they signal a potential shift from risk mitigation to market abuse, undermining systemic integrity.

- 
### [What Are the Regulatory Views on Last Look Practices in the Foreign Exchange Market?](https://options.greeks.live/question/what-are-the-regulatory-views-on-last-look-practices-in-the-foreign-exchange-market/)
![A sleek, domed control module, light green to deep blue, on a textured grey base, signifies precision. This represents a Principal's Prime RFQ for institutional digital asset derivatives, enabling high-fidelity execution via RFQ protocols, optimizing price discovery, and enhancing capital efficiency within market microstructure.](https://options.greeks.live/wp-content/uploads/2025/07/precision-control-for-institutional-digital-asset-rfq-execution.jpg)

Regulatory views on FX last look demand absolute transparency, framing it as a risk control, not a profit tool.

- 
### [What Are the Differences in Leakage Risk between Bilateral and Platform-Based RFQs?](https://options.greeks.live/question/what-are-the-differences-in-leakage-risk-between-bilateral-and-platform-based-rfqs/)
![Precision instrument with multi-layered dial, symbolizing price discovery and volatility surface calibration. Its metallic arm signifies an algorithmic trading engine, enabling high-fidelity execution for RFQ block trades, minimizing slippage within an institutional Prime RFQ for digital asset derivatives.](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-trading-platform-calibrating-rfq-protocols-for-high-fidelity-execution-and-market-microstructure-optimization.jpg)

Bilateral RFQs concentrate leakage risk on a single trusted dealer, while platform RFQs distribute it across a competitive ecosystem.

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---

**Original URL:** https://options.greeks.live/question/what-are-the-primary-arguments-for-and-against-the-use-of-last-look-in-rfq-markets/
