What's an IB?

Beginner Questions
1

I’ve read many descriptions from broker websites, but I still don’t get it.
Do IBs trade? Do they usually get monthly income? It seemed like some brokers provide stable monthly income but then others don’t. Sorry if I sounded like a tard.

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3

Nah. ‘an IB’ is an ‘Introducing Broker’ - they refer clients to brokers and get paid a percentage of the spread/commission earnings in return. To make a modest monthly income you’d need a client base who as group trade >1000 full lots a month … if you get paid $2 a lot … that’s $2000 a month.

4

But there is!! They provide monthly income AND return commissions to their IBs. So I wondered if that’s what IBs usually get.

6

Hi Jesse,

IB is an Introducing broker who can earn commissions by referring every new client to its broker.

Commission of an IB depends upon the trading volumes of his clients. It’s directly paid to the IB by the broker with whom he has a registered IB account and varies from broker to broker as every broker has his own commission structure.

You can become an IB by ordinarily opening an IB account with a broker, drawing more clients to open a live account with them and earning commission on that basis.

7

Are they worth using? I’m concerned that the broker would recoup commissions paid to the IB by manipulating spreads of the client. What’s the advantage? I have one in mind for a particular broker but would like to know if it’s worth using an IB.

8

None to the customer; to the introducing broker, it’s just a form of online affiliate marketing, like any other.

The principle is exactly the same as buying an e-book sold by ClickBank through an affiliate-link: the customer pays the same price as if they had found their own way to the sales-page, but the affiliate earns a commission on the transaction for having generated the traffic. (In the case of forex brokers, it’s an ongoing affiliate-commission.)

Not sure about that: I guess a [I]regulated[/I] broker who did that, and was found out, probably wouldn’t survive for long. I think regulators don’t like brokers displaying different prices to different customers, to put it mildly. But if you’re concerned about it, just don’t do it?

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