In this article you can read about how we calculate exactly your cashback on different currency pairs in the cases where we receive pip rebate after your trades. As you can see on a specific forex broker’s page there are detailed cashback rates for all instruments. However, when we receive our commission in pips (for example 0.3 pip after your 0.9 pip spread) we have to recalculate this pip values to USD equivalents.
What is pip rebate / cashback?
At forex we receive the commission after your trades in pips, so we need to exchange it to USD. (Other brokers offer $/lot values, no matter how many pips are they exactly) To be precise and to be able to show you exact USD/Lot rebate rates for all instruments we calculate pip values with currency pairs and convert it to USD/Lot rebates. We update the exchange rates daily so the cashback rates are fresh every day.
Example for pip rebate calculation
Let’s say you trade 1 lot on USD/CAD on an Fxpro cTrader account. The current exchange rate between USD/CAD is 1.2976 and our commission is 0.6 pip / lot after your trades. You are on Diamond (80%) cashback rate. The USD cashback rate calculation will go like this:
Our commission is 0.6 pip so we receive $6 / lot on EUR/USD after you traded 1 lot. However, if you trade on USD/CAD we’ll receive this 0.6 pip in CAD, meaning we’ll receive 6 CAD after you traded 1 lot. Calculated with the exchange rate 6 CAD equals 4.62 USD. If you are on Diamond level (80%) cashback rate, you’ll receive 4.62 * 80% = 3.69 USD / lot.