The Introducing Broker Model
In Forex, the affiliate is called an Introducing Broker (IB). While the mechanics are similar to affiliate marketing in other verticals, the IB model has unique characteristics that stem from how Forex brokerages generate revenue and how traders interact with the market.
What Is an Introducing Broker?
An Introducing Broker refers clients to a Forex brokerage in exchange for ongoing commissions based on the trading activity of those clients. Unlike iGaming where a player might deposit once and disappear, Forex traders who stick tend to trade actively for months or years. This makes the IB relationship inherently long-term and revenue-aligned.
- Education providers: Forex coaches, course creators, and signal providers who recommend a brokerage to their students.
- Regional agents: Individuals or small firms who recruit traders in specific geographies, especially in Southeast Asia, MENA, Africa, and Latin America.
- Money managers: Portfolio managers or PAMM/MAM operators who bring their managed accounts to a brokerage.
- Affiliate websites: Review sites, comparison portals, and content publishers, similar to iGaming affiliates.
- Other brokerages: White-label or introducing relationships between brokerages serving different markets.
How IBs Differ From Standard Affiliates
The primary difference is the commission model. Standard affiliates are typically paid CPA or RevShare. IBs are typically paid per lot traded by their referred clients. This means IB earnings are directly tied to client trading volume, not just acquisition or net revenue.
A Forex lot is a standard unit of trading. A standard lot is 100,000 units of base currency. Mini lots are 10,000 units, and micro lots are 1,000 units. IB commissions are usually quoted per standard lot traded.
IBs also tend to have deeper relationships with their referred clients. Many IBs provide ongoing support, education, and trading guidance to their clients. This creates a triangle relationship where the IB acts as a service layer between the brokerage and the trader.
What IBs Expect From a Brokerage
- Competitive lot-based or spread-based commissions with clear calculation logic.
- Real-time reporting showing client trading activity, commissions earned, and payout history.
- Multi-level structure support if the IB recruits sub-IBs.
- Fast and reliable payouts, ideally automated on a daily or weekly basis.
- A client trading experience that retains traders, since IB earnings depend on ongoing activity.
- Dedicated IB support, separate from retail client support.
Key Takeaways
- IBs refer traders to brokerages and earn commissions based on trading activity.
- IB earnings are typically tied to trading volume (lots traded), not just acquisition.
- IBs maintain ongoing relationships with their clients, creating a long-term revenue stream.
- Brokerages must provide real-time reporting, fast payouts, and multi-level support.
Explore Further
Key terms and tools related to this lesson. Deepen your understanding and see how Track360 supports these concepts.
Introducing Broker (IB)
An Introducing Broker is a partner who refers new traders to a Forex or CFD brokerage in exchange for ongoing commissions, typically calculated on the trading volume or revenue generated by those referred clients.
Affiliate Manager
An affiliate manager is the operator-side role responsible for recruiting, onboarding, managing, and optimizing affiliate partnerships within a partner program.
CPA (Cost Per Acquisition)
CPA is a commission model where an affiliate earns a fixed payment for each qualifying action, such as a deposit, registration, or purchase, that a referred user completes.
Hybrid Commission
Hybrid commission combines two payout models, most commonly CPA and RevShare, in a single affiliate deal so operators can reward both conversion volume and long-term customer value.