CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Between 54-87% of retail CFD accounts lose money. Based on 69 brokers who display this data. *Availability subject to regulation.
‘Last look’ is a term that many online traders may have come across in the small print of their broker’s terms and conditions for order execution. Traders may not have paid a great deal of attention to this caveat or truly understood what it refers to. However, unless a trader is working from pure direct market access (DMA)/Straight Through Processing (STP), then their market maker broker, the liquidity provider (LP), may take advantage of ‘last look’ rights when processing trade price orders.
When trading forex pair CFDs within a broker’s platform, a price feed on a particular market is provided live. When placing a trade, whether short or long, the opening price should theoretically be the ‘ask’ price given at the moment the trader hits the button to place a trade. However, ‘last look’, gives the liquidity provider, which will be the market maker broker (unless trading with a DMA/STP account), the right to reject the other side of the order at the quoted price. The order is then executed at the next best price that the liquidity provider can offer.
From the trader’s point of view the problem with ‘last look’ order processing is that if the ‘ask’ price is adjusted at the last look, point of execution slippage can result. If the order is passed down through several liquidity providers to find a closer match to the originally provided price, slippage can be significant.
With slippage one of the most significant irritants to traders, it might not seem like it makes a great deal of sense for brokers to practice last look if they wish to be attractive to traders in a competitive market. And yet, some brokers still retain last look rights and act on them by rejecting orders. Why?
Because spot FX prices are not set by and processed through a centralised exchange as is the case with equities and commodities, market makers are more exposed to quick changes in the conditions of underlying markets. ‘Last look’ gives a market maker a couple of hundred milliseconds to reject an order price if it considers it no longer makes business sense to offer it.
Many traders argue that ‘last look’ is a relic of the past and there is no longer any justification for liquidity providers to employ it. In the earlier days of online trading, the technology of liquidity providers was much slower than that of professional buy-side traders and ‘last look’ was a necessary precaution to prevent them from being regularly badly stung. Buy-side advocates of ‘last look’ being abolished maintain that the technology infrastructure now available to liquidity providers long ago caught up and it now simply gives them an unfair edge over traders.
Other cons for traders that last look can result in is that not all price quotes provided on feeds can necessarily always be executed on. This means that slippage becomes a more regular event and execution speed of placing trades can be reduced when last look refusal is employed.
However, last look is not all bad for traders. Having the right to reject orders if they wish means that market makers are able to offer tighter spreads than would otherwise be the case. Bigger orders can also be placed as last look means liquidity providers are less concerned about being badly exposed.
If traders do want to avoid exposure to last look, trading with a regulated ECN broker is one of the best ways to go about this.
Forex.com scored best in our review of the top brokers for last look , which takes into account 120+ factors across eight categories. Here are some areas where Forex.com scored highly in:
Forex.com offers one way to tradeForex . If you wanted to trade EURUSD
The two most important categories in our rating system are the cost of trading and the broker’s trust score. To calculate a broker’s trust score, we take into account a range of factors, including their regulation history, years in business, liquidity provider etc.
Forex.com have a AAA trust score . This is largely down to them being regulated by Financial Conduct Authority, segregating client funds, being segregating client funds, being established for over 19
|Regulated by||Financial Conduct Authority|
|Uses tier 1 banks|
|Segregates client funds|
Want to see how Forex.com? We’ve compared their spreads, features, and key information below.
|USD/JPY Spread||0.90||DAX Spread||250.0|
|FTSE 100 Spread||150.0|
|Platform||MT4, Web Trader, NinjaTrader, Tablet & Mobile apps|
|Base currency options||USD, GBP, EUR|
|Funding options||Bank transfer, Cheque, DebitCard,|