Does a rebate make your spread worse?

This is the most reasonable question a newcomer asks: if somebody is handing money back to me,
surely I am paying more somewhere? The short answer is no — and the reason lies in how the industry’s
distribution works.

1. Rebate money does not come out of your pocket

Brokers budget for acquiring customers. That budget goes into advertising, sponsorship, or
commission paid to an introducing broker. It is a
customer acquisition cost, built into the business model from the start.

Arrive through an advert and the money goes to Google or Facebook. Arrive through an IB and it goes
to the IB. A rebate service simply chooses to pass most of
that commission back to you instead of keeping it.

2. Why the spread cannot be widened just for you

Your fill comes from the broker’s pricing engine, applied to every account of that
type. Which IB you belong to lives in the commission-attribution layer — a separate data
field, not part of the execution path.

Put another way: two Raw accounts at the same broker, one with an IB and one without, see exactly
the same price feed.

3. How to verify it in ten minutes

You do not have to take anyone’s word:

• Open the platform with your rebate-linked account and a
  demo account of the same type.
• Put the two windows side by side, same instrument, same moment.
• Compare the quoted spreads. They must match.

For more certainty, compare the trade statement: fill prices and commission per trade should match
the published schedule for that account
type.

4. The one case that warrants caution

There is a model called spread markup:
the broker lets an IB add an amount to the spread and keep it. This model genuinely exists, but it is
a different thing from a rebate, and it usually shows up with groups running their own price
servers.

How to spot it: if the spread you see is above the broker’s own published schedule for that account
type, ask directly. A genuine rebate service does not touch the spread.

5. What to actually check

Instead of worrying about a widened spread, check three measurable things:

• The rate for each account type — they differ considerably.
• Whether any instruments are excluded (some schemes pay nothing on gold or indices).
• The payment cycle, and whether there is a minimum.

This article is for information only and is not investment advice. Conditions and fee levels are published by the brokers and can change at any time — check with the broker you actually use. Leveraged forex and CFD trading carries a high level of risk and can cost you your entire deposit.