Why Is ‘Last-Look’ Trading Controversial in the Context of Achieving Zero Slippage?

Last-look is a practice, common in OTC foreign exchange and crypto markets, where the liquidity provider has a final opportunity to accept or reject a trade after the client's order is submitted. If the price moves against the liquidity provider during this "last look" window, they can reject the trade, which often prevents the client from receiving positive slippage.

Critics argue this allows the provider to avoid unfavorable trades, making it harder for the client to achieve zero or positive slippage.