The IB business
An introducing broker refers traders to a broker and is paid on what those traders do — per lot traded, per qualified client, or both. This topic covers the economics: plans, tiers, sub-IBs and the arithmetic of a book.
The guide
The referral business behind most retail forex brokers — what an IB does, how they are paid, and what makes the business last.
More on the ib business
Three ways a broker pays an introducing broker, each rewarding a different kind of audience. The deciding variable is not the rate on the page but how long your clients keep trading.
Terms in this topic
- Affiliate
- A partner paid by a broker for sending it customers — usually once per qualified sign-up — whose relationship with the customer typically ends at the referral.
- Copy trading
- A service that replicates another trader's trades in a follower's own account, usually automatically, so the follower's results follow someone else's decisions.
- Cost per acquisition
- A one-off payment a broker makes to an IB for each referred client who meets set qualifying conditions, such as a minimum first deposit and minimum lots traded.
- Hybrid IB plan
- An IB plan that pays part of the CPA upfront for each qualifying client, then a rebate on their trading set lower than the pure rebate plan's rate.
- IB rebate
- A fixed amount a broker pays an IB for each lot their referred clients trade, for as long as those clients trade. Usually tiered by volume or client count.
- Introducing broker
- A person or firm that refers clients to a broker and is paid on the business those clients bring, without holding client money or executing trades.
- Lot
- The unit in which trade size is counted. A standard forex lot is 100,000 units of the base currency; a mini lot is a tenth of that and a micro lot a hundredth.
- Partner agreement
- The contract between a broker and an IB that sets how the IB is paid, which clients and trades count, what the IB may say, and what happens when it ends.
- Spread
- The difference between the bid price, at which a trader can sell, and the ask price, at which they can buy. It is part of the cost of every trade.
- Sub-IB
- An introducing broker recruited by another IB. The sub-IB is paid on their own clients; the recruiting IB earns an override on those clients, paid by the broker.
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