An introducing broker, or IB, is a person or company that refers traders to a forex broker and earns ongoing commission on the trading those clients do. IBs range from individual educators and signal providers to firms that manage local client communities in several countries. This guide explains what an IB does, the main ways IBs get paid, how multi-tier structures work and what the arrangement means for the traders they refer.
What an Introducing Broker Does in the Forex Industry
An introducing broker in forex finds, onboards and supports traders, while the broker holds client funds and processes every trade. The IB never holds client money and does not execute orders. Its role sits in front of the broker: marketing, education, local-language support and helping new clients through account opening.
The model exists because brokers find it hard to reach traders in every country directly. A local IB who runs a trading community, a YouTube channel or a physical seminar business already has the audience and the trust. The broker pays the IB a share of the revenue those clients generate, which turns the IB into a long-term partner rather than a one-off advertiser.
Many IBs also provide services the broker does not, such as market commentary, trading courses or support in a regional language. For referred traders, the IB is often the first point of contact when something goes wrong with an account.
How an Introducing Broker Differs From a Forex Affiliate
An introducing broker and a forex affiliate both refer traders to a broker, but they are paid for different things. An affiliate is usually paid once, through a fixed fee for each referred client who deposits and trades, known as cost per acquisition. An IB is paid continuously, on the trading volume or revenue that each referred client generates for as long as the account stays active.
The difference in pay shapes the work. An affiliate typically runs websites, comparison pages or paid advertising and has little contact with the traders it sends. An IB tends to know its clients personally, answers their questions and keeps them engaged, because its income depends on those clients continuing to trade.
Many partners blend the two models. A website owner might take a one-off fee for most referrals but switch to per-lot rebates for a community of active traders. The right choice depends on whether you expect to have an ongoing relationship with the people you refer.
How an IB Relationship Works From Referral to Payout
An IB relationship runs on tracked referrals. The broker gives each IB a unique referral link or partner code. When a trader signs up through that link, the account is tagged to the IB in the broker's back office for as long as it stays open.
From then on, every trade the referred client places is attributed to the IB. The broker's system calculates the IB's commission on each closed trade, and the IB tracks the running total in a partner dashboard. Payouts are made daily, weekly or monthly depending on the programme.
Attribution is the part of the process that causes the most disputes. Before joining any IB program, check how long a referral cookie lasts, what happens if a client signs up on a different device and whether existing clients can be moved to an IB's code after the fact.
The Main Ways Forex IBs Get Paid
Forex IBs are paid from the revenue the broker earns on their clients' trades. The three main structures are a fixed rebate per lot, a share of the spread markup and a share of net revenue. Some programmes combine more than one.
Fixed Rebates per Lot Traded
A per-lot rebate pays the IB a fixed dollar amount every time a referred client trades one standard lot. A standard lot in forex is 100,000 units of the base currency, and a pip on most pairs is the fourth decimal place of the price. Per-lot rebates are the most common IB structure because they are simple to calculate and easy for the IB to forecast.
Rates usually differ by instrument and account type. A broker may pay one rate on major forex pairs, a different rate on gold and another on indices, because its own revenue per lot differs on each. A headline figure such as "up to $X per lot" usually refers to the best-paying instruments or account types, so ask for the full rate table.
Partial lots count proportionally. A client trading 0.10 lots generates one tenth of the per-lot rebate, so an IB's income depends on total volume, not the number of trades.
Spread Markup Shared With the IB
Under a markup model, the IB's income comes from extra spread added to the referred client's account. If a broker lets an IB add 0.5 pips to the EURUSD spread, the client pays an extra $5 per standard lot round trip. All or part of that $5 goes to the IB.
This model is the one traders should understand best, because it changes their own costs. A client trading through a markup-based IB pays more per trade than a client who opened the same account type directly. Responsible IBs disclose markups, and many brokers cap how much an IB can add.
Revenue Share Agreements Between Brokers and IBs
A revenue share pays the IB a percentage of the net revenue the broker earns from referred clients over a period. The calculation usually includes spread, commission and swap income, minus any rebates or costs the broker agrees to deduct. Revenue share is more common for affiliates and large partners than for small IBs.
The advantage is that income scales with the broker's earnings. The disadvantage is less transparency, because the IB has to trust the broker's definition of net revenue. Any revenue share agreement should state the formula in writing.
Multi-Tier Structures: Master IBs and Sub-IBs
A multi-tier IB structure lets one IB recruit other IBs and earn a share of their clients' volume. The recruiting IB is called the master IB, and the IBs it brings in are sub-IBs. The broker pays the master IB, which then passes an agreed share of each commission down to its sub-IBs, or the broker splits the payment automatically.
For example, a master IB with a $6 per-lot rate might agree to pay a sub-IB $4 and keep $2 on every lot the sub-IB's clients trade. The master IB earns without serving those clients directly, while the sub-IB gets access to the master's negotiated terms.
Multi-tier structures work well for IB networks with genuine regional managers. They become a problem when the main activity is recruiting more partners rather than serving traders, which is a pattern regulators and brokers watch closely.
A Worked Example of IB Earnings That Includes Client Churn
Most IB marketing shows income as clients multiplied by lots multiplied by rate. That figure ignores churn, the share of clients who stop trading each month, and churn is what decides whether an IB business grows or stalls.
Take an IB who refers 10 new active traders a month. Each trader averages 8 standard lots a month, the rebate is $5 per lot and 15% of active traders stop trading each month. These numbers are assumptions for the calculation, not figures from any programme.
In month one, 10 traders generate 80 lots and $400. By month six, the active client base is about 41 traders, generating roughly $1,660 a month. By month twelve, it is about 57 traders and $2,290 a month. The base then levels off near 67 traders, because the steady state equals new clients divided by the churn rate: 10 ÷ 0.15.
The insight is that retention moves income more than recruitment does. Cutting monthly churn from 15% to 10% raises the steady-state client base from about 67 traders to 100 without a single extra referral. That is why IBs who invest in education and support tend to outlast IBs who focus only on sign-ups.
How IB Payments Affect the Traders Who Are Referred
An IB's income always comes from client trading activity, and that creates a conflict of interest worth naming. An IB earns the same commission on a losing trade as on a winning one, and more volume means more income regardless of whether the client's trading is sensible.
For a trader, the practical questions are simple. Ask whether the IB adds a markup to your spread or receives a rebate from the broker's side. Compare your all-in cost per lot with the cost of opening the same account directly. If the cost is identical, the IB is paid from the broker's margin, not yours.
Be wary of any IB who pushes for more frequent trading, larger lot sizes or higher leverage. Leverage magnifies losses as well as gains, and an IB whose income depends on volume has an incentive to downplay that. Good IBs focus on education, risk management and long-term client relationships, because those clients stay active for longer.
Regulation and Compliance Rules for Introducing Brokers
Rules for introducing brokers vary by country. Some jurisdictions require IBs to register with the financial regulator or to operate as tied agents of a licensed firm. Others treat IBs as marketing partners with no separate licence, but still hold the broker responsible for how its partners promote its services.
Whatever the local rules, the broker's own IB agreement sets binding conditions. Most agreements forbid IBs from promising profits, managing client accounts without authorisation, sharing commission with clients in prohibited ways or marketing to residents of countries the broker does not serve. Breaching those terms can lead to commission being withheld and the agreement being terminated.
IBs who manage client accounts or trade on clients' behalf move into a different activity altogether. Asset management and account management usually require their own authorisation, so an IB should never take control of a client's trading account.
How to Evaluate an IB Program Before You Join
A good IB program is transparent about rates, attribution and payouts. Read the agreement carefully before sending a single referral, and check the following points:
The full rate table by instrument and account type, not just the headline rate.
Payout frequency, minimum payout amount and the payment methods available.
How referrals are tracked, how long tracking lasts and how disputes are handled.
Whether sub-IB tiers are supported and how commissions are split.
Any rules excluding certain trades from commission, such as positions held for only a few seconds.
Whether you can add a markup, and whether the broker caps it.
The broker's regulation and the countries it cannot accept clients from.
The quality of the reporting dashboard and whether data can be exported.
The broker's reputation matters as much as the rate. Your clients will judge you by the broker's withdrawal speed, platform stability and support. A slightly lower rate at a broker your clients trust usually earns more over time than a high rate at a broker that generates complaints.
The Tradin IB Program for Introducing Brokers
Tradin is an online forex and CFD broker regulated by the Financial Services Commission of Mauritius under Investment Dealer License GB25204266. Its IB program pays introducing brokers up to $15 per lot, with daily payouts available by card or cryptocurrency, zero setup fees and a real-time dashboard tracking referrals and commissions.
Partners get a dedicated account manager and marketing materials, and high-performing partners can discuss customized commission structures. The program is open in more than 150 countries, but not to residents of the United States, Canada, the UAE and several sanctioned jurisdictions, and partners cannot market Tradin to residents of those countries.
Tradin's clients trade on MetaTrader 5 across forex, indices, commodities, metals, shares and crypto CFDs, and Tradin also offers copy trading, which some IBs use alongside education and community services. Copy trading carries the same risks as trading yourself, and past performance of a strategy provider does not predict future results. For an IB, referring clients to a trusted forex broker with clear regulation and fast withdrawals protects the relationship you have built, and that relationship is where long-term IB income comes from.