What is a Forex Rebate?

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Forex brokerages profit through the Spread and/or Commission charged to a trader. Spreads and Commissions ultimately eat into a traders profits or increase a losing trader’s losses. Forex rebates see traders receive a portion of these costs back from their brokerage either directly into their trading accounts or via a third party. Forex rebates programs have become increasingly popular over the last few years, as they allow a trader to reduce the costs of trading.

How Do Forex Rebates Work?

Many Forex brokerages, enter into agreements with Introducing Brokers. It is the job of an Introducing Broker to bring business to a Forex brokerage with these introducer’s marketing brokerages through a number of different avenues. Introducing Brokers receive commission for the trader’s they bring to a brokerage, with greater trading volume equalling increased commissions for these Introducing Brokers. These commissions are normally equal to a fixed share of the spread or commission.

Forex Rebate
A fictional example of how a Forex rebate might work. In this case our trader would receive a 0.5 pip rebate.

A number of Introducing Brokers released one way to incentive trader’s to sign up with the brokerages they were promoting was to share a percentage of their commission with trader’s. This has led to their being a significant number of Introducing Brokers offering rebates to clients they introduced to their supported brokerages. This has led to fierce competition regarding the kind of deals that clients can get from Introducing Brokers and has led to significantly decreased for traders who wish to deal with certain brokerages.

Typically, rebates are paid by Introducing Brokers via PayPal or some other electronic payment system. Traders typically receive rebates from their Introducing Brokers once a month, but a number of brokerages allow Introducing Brokerages to pay rebates directly into a traders trading accounts and such a system tends to make it easier for traders to receive rebates with out any hassle on their behalf.

It should be noted that their have been a number of cases where Introducing Brokers have reneged on their commitment to give their referred clients rebates. This means that many traders prefer to opt for established and well known Forex rebate programs which have a history of reliably paying rebates to traders.

Spread Reductions

Spread Reductions are something which has been increasingly offered by Introducing Brokers, and see traders receiving a reduced spread when signing up with particular IB’s. As STP brokerages typically add a fixed mark-up onto the spreads they receive from their liquidity providers, which they then share with Introducing Brokers. In this case the Introducing Broker simply forfeits a certain amount of his share of the spread mark-up, which means the trader receives better trading conditions. Despite, the ease of this approach to rebates very few brokerages and Introducing Brokers offer their clients the chance to take advantage Spread reductions.

Where Can I Get Forex Rebates

There literally hundreds of different Introducing Brokers offering a variety of different rebates, and which Introducing Broker you will end going with will depend on the kind of rebate and the particular brokerage you are interested in using. Many traders end up going with larger rebate programs such as the one offered by CashBackForex, where they can choose from a range of different brokerages and opt for the rebate that suits them best.

3 thoughts on “Forex Rebates

  1. Dear Sir/Madam

    Greetings from AETOS!!!

    AETOS Capital Group (AETOS) is a renowned Global broker specializing in financial products trading services. AETOS with its Corporate Headquarters in Sydney and European Headquarters in London has businesses that covers most of the Asia – Pacific and is expanding globally. AETOS is committed to providing retail and corporate clients with diversified financial derivatives products such as CFD in Forex, metals, energy, stock indices and agriculture. AETOS aims to build a world-class trading platform for investors and provide advanced technology and reliable customer service.

    AETOS Capital Group (UK) Ltd. is a wholly owned subsidiary of AETOS Capital Group registered in UK, which is licensed and regulated by the Financial Conduct Authority (FCA), UK since 2013 (FCA No.:592778).

    We would like to discuss with you our Partnership opportunities and how we can mutually benefit from it.

    If you want any further details please don’t hesitate to contact me.

    Looking forward to hearing from you.


    Regards
    Raj Sivakumar

  2. Hello, how are you?
    Introduce my name is Harry CMTrading, representative of the international broker that has many
    attractive offers for our clients and partners. And now we are looking for partners into the IB to develop with us.
    Enjoy a very competitive Rebate Commission. Up to 1 pip/round turn standard lot = $10.
    I see on your website, you are working with other brokers.
    We want to know how to so we can cooperate with you?

    thank you

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