Why brokers pay commission to IBs | Where rebate money comes from

Rebate money does not appear out of thin air: it comes from the commission the broker pays to the IB.

Where the broker's revenue comes from

• Spread and commissions (trading costs).
• Some platforms also include overnight interest and add-on services.

How the commission is allocated

The broker pays part of the revenue generated by a client's trading to the IB that introduced them; the IB then returns part of that to the trader.

Why it matters to you

For you it means getting part of your cost back without changing your spread or execution price.

Notes

• The rebate rate and payout cycle are agreed between the parties.
• It does not change trading conditions and does not promise returns.

Related: how rebates are calculated, rebate vs spread. Not investment advice.