All traders, while trading on the Forex market, pay a commission to their brokerage companies, which provide their clients with the opportunity to trade currencies and other assets on their platforms. But the part of these commissions could be returned to traders’ accounts through Forex Rebates service.
Forex rebates are a kind of discount, which is implemented through the return of a part of the spread or commission. Regardless of whether the transaction was profitable or not, the trader still gets back a part of the funds paid to the broker for the transaction.
FXOpen offers standard conditions for rebates. The company pays a commission from each referral’s trade. The amount of commission ranges:
Let’s consider an example of a trade with a 50% commission return. Trade was conducted on the GBP/USD pair, with a spread size of 3 points, which is $30 for a standard lot.
Let’s assume that 1 order was opened during the week. Regardless of the fact whether there was a loss or profit on it, rebate service will transfer the trader the return on the commission, which is calculated as follows:
30$ (spread) x 0,5 (payout percentage) = 18$
This is the mechanism of rebates in trading in a nutshell. Of the $30 spread paid by the trader, the rebate service returns 60% of that amount, i.e. $18.
Of course, the most obvious advantage of Forex rebate programs is the opportunity for passive income. The reward is directly proportional to the number of trades performed. In other words, the more trades a trader executes, the higher is their rebate. If you multiply the amount by the number of trades performed within a month, you get significant earnings just on rebate payments.
Also, there is always a possibility to take part in different contest programs, often conducted by broker companies. However, a useful recommendation is worth following if you want to use the rebate service as advantageously and safely as possible.
Forex broker rebates, of Forex cashback, should be treated as additional bonuses and not as a decisive argument for opening trades. Rebate amounts are not designed to fully cover potential losses from ill-considered trades.
In general, the rebate system involving a broker, rebate service, and trader looks as follows. The trader registers on the rebate service website that is a partner of the FXOpen Rebates Program and undergoes identification. Then the trader opens an account with FXOpen broker, deposits money, connects personal accounts of broker and rebate service, and receives payment for each transaction, even loss-making one.