How Do Forex Brokers Make Money? Spreads, Swaps, B-Book

Founders weighing a brokerage against a prop firm need to understand the broker's income statement, because the two businesses look alike from the outside and earn money in different ways. A broker earns from clients' trading activity in real markets; an evaluation prop firm earns from fees for a simulated test. This guide breaks down the broker side with published figures, checked on 12 October 2026.

What are a forex broker's revenue sources?

Most retail brokers earn from five places. The proportions differ by model, but listed brokers' results show that the spread and financing line is usually the largest.

• Spreads and markups: the difference between the bid and ask the client sees and the price the broker gets or sets.
• Commissions: a fee per lot or per trade, common on raw-spread accounts.
• Overnight financing (swaps): a daily charge or credit on positions held past the session close.
• Client trading performance: when a broker internalises flow (B-book), client losses are its gains and client profits are its costs.
• Interest and other income: interest on client and company balances, currency conversion, inactivity and data fees.

What do listed brokers' results show?

Plus500 reports the clearest split. Its FY2025 preliminary results, published on 9 February 2026, show revenue of USD 792.4 million. Customer Income, which it defines as OTC "customer spreads and overnight charges" plus income from futures, options on futures and share dealing, was USD 739.4 million. Customer Trading Performance, "gains/losses on customers' trading positions", was minus USD 9.8 million, after plus USD 44.0 million in 2024. The company says it expects that line to "remain broadly neutral over time".

In other words, at a large market maker the business is the spread and financing charges, and the client win/loss line swings from year to year. IG Group reported total revenue of 1,123.4 million pounds for calendar 2025, with net trading revenue of 1,004.6 million, according to Finance Magnates. CMC Markets reported net operating income of 392.6 million pounds for the year to 31 March 2026, defined as "total revenue net of introducing partner commissions and betting levies", with net trading revenue about 74% of the total, per FX News Group.

Do forex brokers make money when you lose?

A broker that internalises client trades does, on that trade. Under a B-book model the broker is the counterparty, so a client's loss is its gain. Under an agency or A-book model the broker passes the trade to a liquidity provider and earns the markup or commission whether the client wins or loses. Most retail brokers run a hybrid, which is why regulators expect a written execution and conflicts policy.

Clients lose often. When ESMA restricted CFDs in March 2018 it said "74-89% of retail accounts typically lose money on their investments", and EU and UK providers must now show their own figure; IG's UK site, for example, states that 70% of retail investor accounts lose money when trading spread bets and CFDs with it. ESMA's measures also capped retail leverage at 30:1 on major currency pairs and required negative balance protection.

Plus500's figures show why large brokers still describe client performance as roughly neutral over time: winning clients and losing clients offset, and hedging reduces exposure. Our explainer on A-book, B-book and hybrid models applies the same vocabulary to prop firms.

How is that different from how a prop firm makes money?

An evaluation prop firm's main revenue is the fee for the evaluation, not trading activity. Its biggest cost is the payouts it awards to traders who pass, paid from its own revenue. It does not earn spreads or swaps, because its accounts are simulated, unless it also owns a brokerage. Our guide to how prop firms make money shows the full P&L.

The cost base differs too. A broker carries regulatory capital, liquidity and client-money obligations. B2Broker's April 2026 estimate puts an MT5 white label at USD 2,700–11,000 a month all-in, before licensing, while a prop firm's largest variable cost is payouts. Compare the two budgets in white label forex broker cost and what it costs to start a prop firm.

Where do brokers get the money to pay winning traders?

From the same pool as any other cost: their capital and revenue. An agency broker does not pay winning trades at all; the liquidity provider on the other side does. A market maker pays winners from its own balance sheet, which is why regulators require capital in proportion to the risk it takes, and why brokers hedge large or consistently profitable flow. Client money held under the rules belongs to clients and is segregated from the broker's own funds in regulated markets.

That is the structural reason founders find prop firms easier to start: no client money, no market exposure on simulated accounts. The reason they find them harder to keep alive is that the payout liability depends on pricing and rules, not on markets; see prop firm payout reserve and our profit calculator.

Should a prop founder start a broker instead?

Only if you can fund a licence and want long-term client relationships with deposits. Some large prop groups have added brokers, most visibly FTMO's acquisition of OANDA, but they did it after years of evaluation revenue. If you are deciding now, our forex licence cost comparison and how to start a forex brokerage set out the brokerage route, and the forex prop firm launch page sets out the evaluation route. PipValley builds websites for both; prop firm builds start at $1,490.

Questions

Sources

1. Plus500: FY 2025 preliminary results (RNS, 9 Feb 2026)
2. Finance Magnates: IG Group posts record 1.12bn revenue, launches strategic review (19 Mar 2026)
3. CMC Markets: Preliminary results for the year ended 31 March 2026 (4 Jun 2026)
4. FX News Group: CMC Markets registers 15% increase in operating income in FY2026
5. ESMA: ESMA agrees to prohibit binary options and restrict CFDs to protect retail investors (27 Mar 2018)
6. IG UK: homepage risk warning (read 12 Oct 2026)
7. B2Broker: MT5 white label cost (Apr 2026)
8. TradeInformer: FTMO completes acquisition of OANDA after getting green light from 5 regulators (2 Dec 2025)