# How IB compensation is calculated

As an Introducing Broker, your compensation is based on the trading volume of your clients and the type of account they trade. Compensation will be calculated each time one of your referred clients makes a trade.

## For standard accounts

Introducing Brokers can earn 25% of the average spread for each trade made on standard.mt4, pamm.standard.mt4 (PAMM managers) and invest.pamm (PAMM investors) accounts.1

Since compensation is taken from the spread, it follows that the more volume an Introducing Broker's clients trade, the more the IB will earn in compensation.

### How the spread Is allocated

25%75%The IB's shareAlpari's share

An IB's compensation depends both on how many trades a client makes and how frequently they trade. Here's an example to show you how this works:

An Introducing Broker refers 3 clients to Alpari.

Client 1

• 1 lot each

Client 2

• 5 lots each

Client 3

• 15 lots each

The bigger and more frequent a client trades, the more the partner earns.

• EURUSD: 1 lot

• EURUSD: 5 lots

• EURUSD: 15 lots

The spread will be distributed between the IB and the company as follows:

13.5 USD4.5 USDAlpari's share = 13.5 USD × 5 tradesThe IB's share = 4.5 USD × 5 trades67.5 USD22.5 USDAlpari's share = 67.5 USD × 40 tradesThe IB's share = 22.5 USD × 40 trades202.5 USD67.5 USDAlpari's share = 202.5 USD × 30 tradesThe IB's share = 67.5 USD × 30 trades

Here's how this all works out:

• Client 1 trades less frequently and at lower volumes, generating the least in compensation.
• Client 2 generates more in compensation, trading more frequently and at higher volumes.
• Client 3, trading the highest volumes, generates the most in compensation.

As you can see in the example, an IB's compensation doesn't just depend on how many trades their referred clients make, but also on the size of each trade.

### Compensation earned from each client

2,025 USD900 USD22.5 USD

1. Alpari does not credit compensation for trades on standard.mt4 accounts if:
• A position is closed less than five minutes after it is opened.
• A position is closed with a profit or loss less than 1 spread.

• The referred client's investment account was already active and a part of the PAMM Account when the position was opened.
• More than 10 minutes passed from the time the position was opened to the time it was closed (or to rollover).

## For ECN accounts

For ecn.mt4 accounts, an Introducing Broker (IB) takes 30% of the commission from the clients they introduce. The size of the commission depends upon the trade volume of the client and is described on the Trading terms page.

Commission is included in the spread on ecn.mt4 accounts, and partner bonuses are calculated based on the following fixed value agent commission: the percent of the fee × 3 × volume of client trades. If the base currency is not in USD, then the resulting amount must be calculated using the appropriate exchange rate of the base currency to USD.

Let's look at an example.

Example calculation

The IB introduces 10 clients who open an ecn.mt4 account in the month.

In the month, each client makes 20 trades, and all clients trade the currency pair EURUSD.

Using the formula to calculate earnings for each client: 30% (the percent awarded to the partner) × 3 (fixed value of agent commission) × 20 (trade volume) × 1.3 (exchange rate of EURUSD, as the base currency of the exchange pair is EUR) = 23.4 USD.

So in total, the Introducing Broker will earn 23.4 USD × 10 = 234 USD.

## For PAMM Accounts

The compensation that partners can earn for bringing in clients who either invest in, or open a PAMM Account depends upon the type of PAMM Account and the share of the client's funds in the account. Calculations for investors in the PAMM service are based on the amount they invest, and calculations for managers are based on the amount of the manager's own funds.

For Standard accounts, the partner earns 25% of the spread on trades made by the clients they introduce. For ECN accounts the partner takes 30% of the commission on trades made by the clients they introduce.

For example, the IB attracts Investor 2. For standard accounts, he receives 25% of the spread on trades which are made using the funds invested by the clients which he attracts, and for ECN accounts – 30% of the commission.

### How the compensation is calculated

SpreadPartner compensationShare of investor 1Share of investor 2Share of investor 3Managers capital