IB rebate
Definition
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.
What it means
A rebate is paid per standard lot traded by clients the IB referred, and recurs: every month a client trades, the IB is paid again on what they traded. Partial lots earn a proportional share of the rate.
Rates are commonly tiered. The rate climbs a ladder as the month's traded lots or active client count pass set thresholds, and where both measures are used a plan often pays on whichever is higher. Rates also differ by instrument group — metals, forex and other instruments are often paid separately — and by account type. Some programmes pay only on trades held longer than a set minimum, and some let the IB add a markup per lot, which the client pays through a wider spread or a higher commission.
Example
An illustrative book: 40 active clients each trading 5 lots a month produce 200 lots. At an illustrative $7 per lot, the IB is paid $1,400 for the month — and again the next month, if the same clients keep trading.
Why it matters to an IB
A rebate rewards retention. It pays little in a book's first months and more as the book builds, so it tends to suit IBs whose clients stay and keep trading — educators and communities rather than fast-moving feeds. See how IB commission plans compare.