Introducing brokers appeared over 35 years ago and originally worked in the commodities market. That’s why you can often come across the term “Сommodity broker” when searching the web for a definition of an introducing broker.
As the markets evolved and trading became available to millions of people, not only professionals, introducing brokers started to provide their services in various markets and work with different financial products such as stocks, currency pairs, indexes, options, etc., and the most hyped product in the past 10 years – cryptocurrencies.
Basically, an IB acts as an intermediary between a broker and a trader connecting them to each other. In this type of cooperation, a broker is responsible for executing trades, while an IB takes care of clients by consulting them and providing support.
HOW TO BECOME AN INTRODUCING BROKER?
There are no legitimate companies that accept traders from IBs in Europe.
The good news is that IBs are welcome if they operate outside of the EU.
The rest is simple: you need to choose a broker, register an IB account, get your IB link, refer clients to the chosen broker, and start earning.
WHO CAN BECOME AN INTRODUCING BROKER?
There are practically no restrictions for those who want to become an IB. Today you don’t have to be a professional trader, neither do you need to obtain any specific licence.
Anyone can apply, but not everyone can succeed in this business.Keep in mind that it is easy to get an introducing broker account, but it is much more difficult to start making real money, turn into a successful IB.
WHAT DOES AN INTRODUCING BROKER DO?
Introducing Broker refers (introduces) customers to a broker. Trader should open an account via IB link in order to be identified as IB’s customer. Once the referred clients funds the account and start trading, IB starts earning commission based on trader performance.
WHAT DOES AN IB REWARD DEPEND ON?
Profit or Commission directly correlates with clients’ trading performance (trading turnover) — i.e. the more the referred clients trade, the higher the IB’s income is.
Initially, Introducing Brokers mainly serviced local customers, but today, when the internet allows you to be available 24/7, many IBs have foreign clients all over the world. Their accounts sometimes constitute up to 50% of an IB’s total portfolio. This means that IBs now have more possibilities to earn as they can easily build, maintain and increase an international client base.
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