Introducing brokers or I.B is a business that folks and different firms contending with the real estate markets likes to do simply due to the lucrative earnings attached with it. A lot of people that are people who just love forums, blogs and other forex groups are that come with different brokerage firms such as HotForex, Axitrader, FXCM etc. The contract is simple. Introducing brokers or I.B introduce new customers about bat roosting overseas brokers and in-turn get money a good commission on fx cashback forex produced by their referral. There is no maximum about the earnings that business can generate in the event the marketing is performed efficiently. The example below would clearly illustrate the tentative earning that the Introducing broker will get on referring only 100 Clients.
Mr. Sudan from From India has a financial blog. He’s got almost 2000 Subscriber’s, these subscribers are referred to one of the popular broker Hotforex. Only 100 clients join within this referral basket. Meaning the conversion ratio is only 0.05 which actually bad normally in the marketing metrics any conversion ration under 2% is really a quite poor achievement. Now let us calculate just how much they can earn on a monthly basis from all of these referrals.
According to tentative contract let’s say HotForex pays 9$ per standard lots (100,000 units of base currency) traded by the referrals.
With an average, each referral trades 100 standard lots. There are 28 trading days in a month. So, the approximate earning of Mr. Sudan will be 100 lots * 9$ * 100 referrals= 90,000$ that is a substantial income. This income doesn’t have a maximum, in reality from my own experience like a corporate Introducing broker, there are various 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 in this tier by almost 20% 100-1000 Clients.
T3= Tier three The best level, this is the maximum level and it is agreed to large institutional IB’s, some brokers share almost 70% of these 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 as being a lucrative earning opportunity, ecommerce may not be suitable for everyone, as this is not essentially a collection & forget kind of business. The obligation of the Introducing broker is to provide all services including help for KYC, Choosing the suitable account types, funding the account, Help in withdrawal’s etc. So, there might be a necessity of dedicated support staffs who can aid in these tips.
On this modern era, the Introducing broker concept is proven to a lot of people. There is various companies offering Forex cashback programs / Forex pip rebates this can be entirely a new concept to drive new leads very easily without investing heavily on marketing. The property owner IB’S simply shares 70-80% of these earned revenue making use of their introduced clients, it will help to reduce the trading costs, recover a share of losses for their trades. Just about the most successful venture will be the cashback forex running considering that the early 2006. Other new entities have grown to compete efficiently. Now this is a war between Introducing brokers. Customers often consult 3-4 Introducing companies before finally joining one, to ensure that he/she is sure about getting the maximum cash back.
We are a comparatively new company supplying a solid rebate program, other useful services such as trading signals, managed account trading, Forex programming. But our main objective is always to work with only trustable foreign exchange brokers who does never run away without client’s money. Most of IB’s blindly accept deals from various brokers without using a necessary background check. But as far my experience 95% with the foreign exchange brokers based in the internet are scammers.
# Shantz, Trader & Currency markets Analyst since 2007 © RISECAP Advisory Solution LLP
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