Introducing Brokers, or IBs in short, are independent broker-dealers acting as agents whose task is to introduce new traders to a brokerage firm such as Alpha Trading.
Introducing Brokers earn commissions calculated from the traded volume of the traders they introduced to the brokerage firm.
It’s in the best interests of the Introducing Brokers for their clients’ trades to be profitable because the more they trade the more revenue is generated for the IB.
To make their offerings more alluring, IBs often give market rebates to their clients usually by sharing a percentage of their generated revenue with them.
Market rebates are perhaps the main reason why some traders prefer to trade with a brokerage firm through an Introducing Broker.
Some IBs enrich their offering even further, by giving out valuable gifts such as premium grade Expert Advisors, advanced technical indicators and comprehensive educational resources and materials including e-books, video tutorials, trading workshops or webinars and even daily market analysis performed and written by expert financial analysts.
Many individual broker-dealers prefer to act as intermediaries of a large brokerage firm because they can cut down on marketing and advertising fees by getting free access to effective marketing and advertising resources which would otherwise be quite costly.
Client Funds are always kept with internationally reputable banks.