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Overview
An introducing broker, usually shortened to IB, refers clients to a brokerage in exchange for ongoing compensation, without ever holding client funds, executing trades, or acting as the counterparty. The brokerage handles all of that. The IB's job is bringing in and supporting traders, and getting paid a share of the trading activity those clients generate.
How an IB actually operates
In practice, an IB might run an education service, a trading community, a signal provider, or simply a referral website, and route anyone who signs up to a specific broker under a tracked partner link or account code. The broker credits the IB for every referred client's trading volume going forward, not just for the initial signup, which is what separates the model from a one-time referral bonus.
Larger IBs often go further than pure referral, negotiating custom commercial terms directly with the broker, providing dedicated account managers to their referred clients, and sometimes running their own branded trading room or education platform on top of the underlying broker relationship. Smaller IBs might simply be an individual trader with an audience who shares a referral link and earns a modest ongoing rebate with no additional service layer.
How IBs get paid
Rebate per lot: a fixed cash amount paid for every standard lot a referred client trades, regardless of whether that trade wins or loses.
Spread or commission share: the IB takes a percentage of the spread markup or commission the broker earns on referred client trades.
Hybrid arrangements: a smaller per-lot rebate combined with a percentage share, common with larger IBs negotiating custom terms.
One-time CPA payouts: a fixed fee for each verified, funded new client, sometimes layered on top of ongoing rebates.
Payout frequency also varies by broker; some pay weekly, others monthly, and a few hold a portion back for a rolling period to cover potential chargebacks or client withdrawal reversals. It's worth asking about this cash-flow detail upfront, since an IB with a large referred client base but a 60-day payout hold can face real working-capital pressure even while technically profitable on paper.
Introducing broker vs affiliate: what's the actual difference
The terms get used loosely, but there is a real distinction in most jurisdictions. An affiliate is typically a pure marketing relationship: they drive traffic and get paid, with no ongoing responsibility to the client. An IB is treated as an extension of the broker's client-facing operation, expected to provide some level of support, education, or account servicing, and is often required to register as an IB with the relevant regulator rather than operating purely as an unregulated marketing partner. In the US, for example, introducing brokers dealing in futures or forex must register with the NFA. In the UK, IB activity can fall under FCA oversight depending on what services are actually provided.
What to check before becoming one
Confirm what registration, if any, applies in your jurisdiction before taking on clients, since operating as an unregistered IB where registration is required can carry real regulatory consequences. Read the broker's IB agreement closely for payment terms, minimum activity thresholds, and what happens to your rebates if a referred client's account goes inactive.
Reputable brokers publish clear IB terms rather than negotiating everything informally, which is generally a good sign of how they will treat payouts down the line.
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