A per-lot payment returned to a trader for volume traded, either by the broker for high activity or by an affiliate sharing its commission.
Rebates reduce net trading cost, which is genuinely useful for high-frequency, low-margin strategies. They are also an incentive to trade more, and cashback portals fund them from the same markup you are paying.
A rebate is only worth having if the underlying pricing is competitive. Paying 1.6 pips to receive $3 back per lot is worse than paying 0.9 pips with no rebate.
Example: a trader doing 150 lots a month receives $2.50 per lot, $375, against total spread and commission of $1,650. Net cost falls to $1,275, or roughly 23%.
Original diagrams for the ideas on this page. Illustrative, not real market data.
The bid-ask spread. Buy orders sit below, sell orders above, and the gap between the best bid (50.01) and best ask (50.04) is the spread you pay to cross. Bar length shows the size resting at each price.
Educational only, not advice. Spotted an error? Post in Site Feedback.