You receive the commission in the amount of a certain percentage of the spread of clients’ orders. It depends on your current IB Grade.
It is calculated the following way:
Spread * Commission level multiplier = Commission per trade, where
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Spread is the difference between a trading instrument Buy and Sell prices at the moment of order opening and closing;
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The commission level multiplier depends on your average commission for the last three months;
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The Commission per trade is the amount of commission you receive.
For example, if you are a Grade 1 IB, the commission percentage is 30 %. A client has traded 5 lots of GBPUSD, with a spread of 13.6, then the calculations are as follows:
Commission = 5 * 13.6 * 30% = $20.4
You can use this formula to calculate the approximate amount of the commission for the particular instrument based on the average spread.
During the release of major economic news, the spread may drastically rise above average, and this might lead to attempts of fraud on the partner commission. To avoid fraudulent actions in such cases, the reduction rate is applied.
Thus, if the spread has risen above the average, the commission will be calculated according to the formula:
Commission = Spread * Commission level multiplier * Reduction Rate, where
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Spread is the current spread value converted to USD.
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Commission level multiplier is your personal modifier based on your IB grade.
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Reduction Rate is the modifier applied to the spread.
The rate is calculated in the following way:
Reduction Rate = Average spread / Current Spread
Important! To make the calculations, the spread should be converted to USD.