Introducing brokers or I.B can be a business that individuals and different firms getting the markets wants to do simply as a result of lucrative earnings that come with it. Many individuals who are people who just love forums, blogs and different forex groups are placed on different brokerage firms for example HotForex, Axitrader, FXCM etc. Anything is simple. Introducing brokers or I.B introduce new business about bat roosting overseas brokers and in-turn receive money an excellent commission on every trade produced by their referral. There isn’t any maximum about the earnings that business can generate in the event the marketing is performed efficiently. The instance below would clearly illustrate the tentative earning that an Introducing broker can get on referring only 100 Clients.
Mr. Sudan from From India has a financial blog. He’s almost 2000 Subscriber’s, these subscribers are known about the most broker Hotforex. Only 100 clients join on this referral basket. Meaning the conversion ratio is only 0.05 which in reality very poor normally in the marketing metrics any conversion ration lower than 2% is a quite poor achievement. Now let’s calculate simply how much he is able to earn on a monthly basis from these referrals.
As per tentative contract let’s say HotForex pays 9$ per standard lots (100,000 units of base currency) traded by the referrals.
On an average, each referral trades 100 standard lots. You can find 28 trading days in a month. So, the approximate earning of Mr. Sudan is going to be 100 lots * 9$ * 100 referrals= 90,000$ which is a substantial income. This income doesn’t have a maximum, in fact from my own experience being a corporate Introducing broker, there are many tiers of earnings like:
T1= Tier one Basic Tier the lowest revenue paid to IB 1-100 Clients approximately
T2= Tier two Secondary Tier, the revenue is increased within this tier by almost 20% 100-1000 Clients.
T3= Tier three The ultimate level, here is the most and is also offered to large institutional IB’s, some brokers share almost 70% of the revenue with the introducing brokers
Eg: Hotforex earns about 15$ per standard & with this tier an Ib can end up getting almost 11$ per standard lots traded by their referral.
In spite of being a lucrative earning opportunity, this business is probably not ideal for everyone, since this is not essentially a group & forget type of job. The obligation from the Introducing broker is always to provide all services including help for KYC, Choosing the suitable account types, funding the account, Help in withdrawal’s etc. So, there could be a need of dedicated support staffs who can assist in these matters.
In this modern era, the Introducing broker concept is already recognized to a lot of people. These days there are various companies offering Forex cashback programs / Forex pip rebates this can be entirely a fresh concept to operate a vehicle new leads very easily without investing heavily on marketing. The property owner IB’S simply shares 70-80% of the earned revenue using their introduced clients, it will help to attenuate the trading costs, recover a percentage of losses for trades. Probably the most successful venture may be the cashback forex running because the early 2006. Other new entities have cultivated to compete efficiently. Now this is really a war between Introducing brokers. Customers often consult 3-4 Introducing companies before finally joining one, so that he/she is bound about getting the maximum cash back.
We are a relatively new company offering a solid rebate program, other value added fx cashback forex for example trading signals, managed account trading, Forex programming. But our main objective would be to use only trustable foreign exchange brokers who would never run away without client’s money. Most of IB’s blindly accept deals from various brokers without performing a necessary criminal record check. But as far my experience 95% of the fx brokers based in the internet are scammers.
# Shantz, Trader & Currency markets Analyst since 2007 © RISECAP Advisory Solution LLP
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