How do the trader, broker and IB relate to each other?
IB stands for Introducing Broker. In simple terms, an IB introduces clients to a broker and may help with account opening, account attribution and ongoing support. When eligible clients trade, the broker may pay the IB a commission under the relevant partnership arrangement.
The exact calculation differs by broker, account group and agreement, but the basic flow can be understood like this:
So a rebate is not money created from nowhere. It is the amount of eligible IB commission that the IB chooses to return to the trader.
Why do rebate providers offer different rates?
Once an IB receives commission, it can keep more of that commission as revenue or return more of it to the client.
That is why the same broker and account type can show different rebate figures on different rebate websites. The important question is not simply “who advertises the highest rebate?” but how much your exact account and product actually receives per standard lot.
What does “full rebate” actually mean?
This term is easy to misunderstand. A full rebate does not mean that 100% of every spread and fee charged by the broker is refunded.
At Max Rebate, “full rebate” refers to returning the eligible IB commission available under the current arrangement to the client, subject to correct account attribution, valid trading activity and platform approval, rather than taking an additional service share from that eligible rebate.
Using the current TMGM STD gold structure displayed on Max Rebate as an example:
| Example rebate arrangement | Per standard lot |
|---|---|
| Other common rebate example | USD 18 |
| Current Max Rebate arrangement | USD 20 |
| Difference per lot | USD 2 |
Actual eligibility, account groups and amounts remain subject to platform records and approval.
Why does a USD 2 difference matter to EA and high-frequency traders?
For a low-frequency trader, USD 2 per lot may not look significant. For EA, systematic or naturally high-frequency traders, the difference compounds with volume.
| Monthly trading volume | Extra rebate per month | Extra rebate per year |
|---|---|---|
| 100 lots | USD 200 | USD 2,400 |
| 500 lots | USD 1,000 | USD 12,000 |
| 1,000 lots | USD 2,000 | USD 24,000 |
This is why active traders should compare long-term all-in costs, rather than looking only at one advertised spread or commission figure.
Why does rebate transparency matter?
A trader should be able to answer at least four questions:
- Which account group am I in?
- What is the rebate per lot for the products I actually trade?
- Is my account correctly attributed to the relevant IB?
- Can I reconcile the rebate received with my own trading records?
This is why Max Rebate publishes information about TMGM rebates, TMGM account types, account-opening links, existing-account handling and trading costs. The goal is for clients to understand how commissions are calculated before they trade, rather than discovering missing value after settlement.
Rebates reduce costs — they are not a trading strategy
Trading more simply to earn more rebates is not sensible. More trades can also mean more spreads, commissions, slippage and market risk.
The better way to think about rebates is: if these trades would have happened anyway, the rebate can reduce part of their cost. For traders who already use EAs, systematic strategies or high-frequency approaches, small differences per lot naturally become more meaningful as legitimate trading volume grows.
IBs, rebates and Max Rebate in one sentence
Original Max Rebate editorial article, rewritten from general public industry explanations and adapted specifically to IB, TMGM rebate and full-rebate use cases.