How Does the “Last Look” Mechanism Function in an RFQ Environment?

"Last look" is a feature where the liquidity provider (LP), after receiving a client's request to trade at the quoted price, has a final, brief opportunity to accept or reject the trade. This is typically done to protect the LP from 'stale' prices caused by high-frequency trading or latency, ensuring they don't trade at a loss due to market movement.

While it protects LPs, it introduces 'information leakage' risk and potential execution uncertainty for the client.