Sub-IB
Definition
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.
What it means
A sub-IB structure adds a second layer to an IB business. The recruiting IB — often called the master IB — brings in other IBs as well as, or instead of, traders. Each sub-IB refers their own clients and is paid on them under their own plan. The master IB earns an override: an amount calculated on the activity of the sub-IB's clients.
The override is paid by the broker, not taken out of the sub-IB's pay, and its terms sit in the master IB's partner agreement. Programmes commonly cap how many levels deep a structure may go, and some pay overrides only on certain plans or instrument groups.
Example
An illustrative month: a master IB has recruited three sub-IBs, whose clients trade 600 lots between them. At an illustrative override of $1 a lot, the broker pays the master IB $600 on those clients. Each sub-IB's own rebate is unchanged.
Why it matters to an IB
A sub-IB network turns an IB from a publisher into a recruiter. The override is only as good as the sub-IBs' audiences, so the work shifts from making content to judging whose following is real, engaged and not already tied to another broker — a measurement problem before it is a sales one.