Introducing Brokers get rewarded by recommending a good Forex Broker to aspiring traders. For this they need to partner with some successful traders, financial website owners, investment advisors and recommend the broker’s services to them. For soliciting traders for the brokers, the IB gets quite a fair remuneration. The commission can be calculated on the broker's Forex CRM system based on the trader’s performance. Let us here see how the Cloud Forex CRM calculates IB commissions:
Cloud Forex CRM includes a dedicated module for IB commission profiles, allowing you to create and assign profiles to different IBs or groups. These profiles can be initially saved as drafts and can be modified multiple times before finalizing and publishing them. Each profile can consist of multiple records, which are determined by various factors such as symbols, securities, account types, currencies, commission types, and commission values. Furthermore, you can create unique combinations for different trading platform servers and select specific security groups. Within these selected groups, you have the flexibility to determine the number of available symbols and create combinations of currency and commission values accordingly.
However, options of multiple combinations of commission profiles are available but the commission can be calculated on the basis of three different commission types and these are:
This is the most common and frequently used type of commission where the size of the trade and the commission value fixed by the broker determine the remuneration an IB would get. The formula for calculating fixed commissions would be as simple as the number of lots multiplied by commission value.
By default the PIP commission would be calculated as Number of Lots * Commission value you have already set * [(Closed Price – Open Price)] * 10^n-1 where n=no. of decimal points.
Here, the broker can restrict the commission value based on the PIP value of every symbol the client trades for. The broker gets a chance to add different PIP values for different symbols and then create a profile to calculate the commission based on the PIP formula. This time the commission would be calculated as number of lots * commission value the broker has set * PIP value of that particular symbol.
If the broker has added the combination for security and then added a combination with the same security with its individual symbol, then the system will take the security with an individual symbol into consideration and will generate the commission accordingly.
This method of calculating the commission is only applicable on the amount deposited by a particular IB. This is irrelevant to open or closed trades, or any activities done by the sub IBs. Deposit type is specifically used when the broker wants to give commission on the deposit amount made by the IB. Here, you just have to enter the percentage value based on which the commission would be calculated. Deposit amount multiplied by the percentage value would calculate the commission earned by the IB.
Cloud Forex CRM offers extensive flexibility in commission calculations for IBs and sub IBs. It allows you to customize commission levels and set specific restrictions on amounts. By creating different combinations, as explained earlier, you have the ability to extend commissions to desired levels and control the amounts accordingly.