oneZero sweetens offering with insights into impact of ‘last look’ practice
oneZero Financial Systems, a provider of brokerages and trading technology, has introduced a new analytics tool that provides a glimpse into the use of one of FX market’s most common, and potentially abusive, practices.
The ‘last look’ allows market makers get a final opportunity lasting a few milliseconds to reject an order after a client commits to a trade at a quoted price.
oneZero’s last look insights are available in its Data Source Insights product. In essence, it increases transparency for liquidity consumers on the other side of a trade who are now able to compare the reject rates at liquidity providers on a relative basis.
The data-driven approach calculates the estimated economic impact of trades rejected in a last look protocol, effectively creating a framework where sustainable relationships can be identified more easily. It helps users better understand the relationship between “the type of flow they send to LPs, quoted spreads and the impact of last look rejections when constructing their pricing and hedging functions,” the company said.
The level of FX counterparties using the ‘last look’ method has fallen since the introduction of the Global FX Code of Conduct. Most recently, the independent committee indicated that liquidity providers and platforms shouldn’t undertake any trading activity that uses information from a client’s trade request during the last look window.
oneZero’s intelligence solution creates reports and diagrams based on unique metrics and parameters. The standard package provides basic insights such as fill times at a liquidity provider based on a source of flow, size and/or currency pair. This data should be enough for the LP customers to estimate when and for how long the last look may be taking place.
Meanwhile, the advanced package takes a step further by enabling users to compare LPs with different last look approaches. The symmetry between hold times and reject rates helps clients in making their liquidity choices as they become aware of the impact of the last look rejection on trading costs, such as the spreads.
oneZero CEO and co-founder Andrew Ralich commented: “oneZero plays a critical role in the market as a counterparty-agnostic technology provider. Last look analytics will provide better information that will lead to more informed outcomes for our clients and the whole market. This is especially important at a time when the industry is focused on the development and fair and effective usage of the last look process.”
Just a few months ago, oneZero announced a series of fresh updates to its Liquidity Hub, which presented new features geared toward improving the capabilities offered by the platform to institutional and B2B clients.
In particular, oneZero rolled out new multi-asset capabilities to its product which provide a means for broker-dealers and market makers to optimize their liquidity and client pricing. The new upgrades improve the user experience and expand control functions for their clients operating in the institutional and retail FX, commodities and futures markets.
oneZero has already been highly active with multiple initiatives and several developments that have dominated headlines over the past few months.