Trading is hard enough, and then you have to deal with a slew of transaction costs pouring in on a regular basis. Whether you are the largest or smallest of traders, this is a hurdle you want to minimize as much as possible.

To reinforce this, we regularly recommend traders enter non-inflated cost/spread rebate programs.

Here's how it works:

A. The bad option

An introducing broker makes an agreement with a retail broker to get a cut of transaction volume for clients introduced. To either cover costs and bump up profit, either the broker or the introducing broker will inflate costs passed onto the client, vs. what the client would normally pay if they just signed up through the broker from the very beginning.

B. The good option

No costs are inflated, and the rebate is split between the introducing broker and the client. Simple as that.

In most circumstances, the trader is going to greatly benefit and save anywhere from .2-.8 pips/lot by using a rebate structure through an IB. That's a massive advantage in the long-haul. Hedged strategies are even available to take advantage of the rebate structure and provide the trader with profit that he/she wouldn't normally see. Rebate capture is a commonly sought after component of strategy on exchanges by a large range buy-side firms.

We partnered up with a great company has been paying out rebates since 2008 and has, hands down, the most established track record in the business.

…..and they work with US clients, as they're a registered IB with the NFA. Even if you have a preexisting account, you can use them. I've been using them on my personal accounts for years and in no way would consider any other route.

5/5 (4)

ParaCurve is free and has been since 2008. Help us out and rate our content!

Start typing and press Enter to search