What is an "Introducing Broker"?

Discussion in 'Trading' started by 1a2b3cppp, Jan 26, 2009.

  1. I'm sure this question drops me down into "stupid noob" category, but what the hell is this? I hear it all the time. Is it like a term for a new brokerage or something?

    It confuses me cuz "introducing" is a verb, but it's always used like an adjective. "This is an IB." what?
  2. http://www.investopedia.com/terms/i/introducingbroker.asp

    One possibility
  3. Oh. You know the last 3 or 4 terms I looked up on the website weren't listed, so I gave up. lol.

  4. A small brokerage firm that 'introduces' a client to an FCM for clearing...
    IB's can be guaranteed, which means that they only have one FCM that they clear through...
    they can be independent, which means they can have multiple clearing firms...
  5. wave


    An IB (introducing broker) simply markets their own name and handles customers, but all the trading goes thru another company, such as an FCM. XYZ Futures = IB and OpenEcry = FCM providing trading platform and then you have the clearing firms used by the FCMs.
  6. Jachyra


    Introducing Brokers "introduce" business/clients to clearing firms and service the accounts on the clearing firm's behalf.