Hi, I've been trading for a couple of months and have come across several rebate companies, does anyone know if you have to pay these companies commission on the rebates they pay you? I've looked at a couple of company's like Cashback Forex and Rebate Army, but it doesn't have anything in their frequently asked questions section.
Hope someone can enlighten me. Many thanks in advance
Rebate programs are for some reason (it would appear anyway) largely misunderstood or dismissed out of hand or perceived to be some type of scam or the other. As with brokers: there are reputable brokers and there are 'bucketshops'. With rebate programs and rebate companies: the same applies. But strictly speaking there's no 'catch' to rebates. Simply put: the rebate company is actually providing just another 'feeder channel' to the brokers affiliated with them is all. In other words: although the broker pays the rebate company who in turn pays the trader (or Introducing Broker for the rebate company i.e. one does not need to be an active trader to earn rebates but can simply be an Introducing Broker for the rebate company and still earn commissions without actually trading and those commissions can add up handsomely given enough time and effort on the part of the Introducing Broker for the rebate company) the broker is getting promoted by the rebate company in return. From the brokers point of view it's just another form of (cheaper???) advertising and marketing is all.
I must say that that Rebate Army's website (rebatearmy.com) does give a fine 'no nonsense' explanation of rebates and how they work etc. I also happen to know that they're one of the better ones around and actually DO PAY their rebates out ON TIME!!! That's one of the reasons why we're (Deltastock and DF Markets) are currently negotiating a deal with them i.e. hopefully to be able to pass on some 'spectacular' rebates to potential clients (and also the reason why Deltastock and DF Markets do not as yet appear on their list of brokers).
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