An introducing broker (IB) is a person or business that refers traders to a broker. When those traders trade, the broker shares part of what it earns from them — usually a fixed amount per lot traded — with the IB. That payment is called a rebate.
How the money flows
- 1The IB shares a personal referral link.
- 2A trader opens and funds an account at the broker through that link.
- 3The trader trades; the broker earns from the spread and/or commission.
- 4The broker pays the IB a rebate based on the lots traded.
With a typical IB arrangement the client trades on the broker's normal pricing — the rebate comes out of what the broker already earns. Always check how your own agreement is set up, and be open with clients that you're a partner.
What IB income actually depends on
- The number of active clients — not sign-ups, but people who keep trading.
- How much they trade (lots per month).
- Your rebate rate per lot, which varies by broker, account type and instrument.
- How long they stay. A client who blows their account stops trading.
That last point is why the best IBs focus on education and risk management. Pushing people to over-trade might raise volume for a month, but it ends with blown accounts and lost trust.
Rules to stay out of trouble
- Never promise income or results. Show losses as well as wins.
- Always disclose that you're a partner and may earn a rebate.
- Never ask anyone to send money to you personally.
- Check what's allowed where you and your clients live — rules differ by country.
IB income is not passive or guaranteed. It's built on real people trading over time.