# Calculating the value of your rebate

This is an overview of how to calculate the value of your rebate based upon the lot size, the volume of the trade and the value according to spread.

Rebates are quoted in either percentage value or in pips. The value of the percentage and or value of the pips offered as a rebate is calculated as below:

How much rebate can you get?

## Step1

The first place to start is to calculate the value of a pip. To do so use the following calculation:

(x/y) * (z)

Where “x” is the pip, “y” is the currency exchange rate and “z” is the base currency unit amount or size.

In the case of EURUSD

X is 0.0001 (for four decimal brokerage firms) or 0.00001 (for five decimal brokerage firms) (0.01 for two decimal instruments)

Y is the current rate (currency exchange rate)

Z is the base currency unit size or amount (if trading \$10,000 lots sizes or 0.1 then Z is 10,000 or if trading \$100,000 lots sizes or a full lot then Z is 100,000)

Lets do the math:

(0.0001/1.37440)  * 10,000 = €0.7275

If you want this value in USD or another currency rate just take the pip final value and multiply by the exchange rate. In this case we want the value in USD so lets do the math again:

0.7275 EUR * 1.37440 = \$1 USD

Value of 1pip in the above equation is USD\$1.00

Super Easy Trick

Does not matter how you do the math but whenever the secondary currency is USD the value will always be as per the chart below:

 Lot Size/ Volume 0.001 / 100 0.01 / 1,000 0.1 / 10,000 1 / 100,000 Pip Value USD \$0.01 \$0.1 \$1 \$10

### Step Two

Once you know the value of your pip in your currency choice you can now calculate the value of your rebate. To do this you need to know the spread you are paying.

If the spread on EURUSD is 3pips then the value of the spread is 3 multiplied by the value of the spread. Please note that the value of the pip has to be relevant to the value of the currency pair that you are looking at. If the spread on EURUSD is 3pips the dollar value of the spread is calculated using the pip value of a pip for the same pair.

If the USD value of a pip for EURUSD is \$1 for the volume you are trading then the spread would work according to the below calculation:

Pip value

[(x/y) * (z)] * spread amount

Using the details as above lets do the math

[(0.0001/1.37440)  * 10,000 = €0.7275] * 3 = €2.1825

To get this to USD

2.1825 EUR * 1.37440 = \$3 USD

To calculate the value of your rebate as a percentage

If you know you are getting a rebate back of 25% of the spread use the following calculations to get the dollar value (We get it back in USD and pay you in your chosen currency):

Spread value in USD in the above case is \$3 so 25% of this amount is (\$3*25%) / 100 = the rebate value in Dollar terms.

So  (\$3*25%) / 100 = \$0.75

To calculate the value of your rebate as a fixed amount

If you chose a fixed rebate then you select a fixed rebate which value is as simple as below:

Rebate 0.7 and we know that a pip is worth \$1 (according to the above) then the value of the rebate is \$0.7

Extra: If you wish to know the difference between a fixed rebate value vs. a percentage value then work out the percentage of the fixed rebate of the nominal spread:

Formula is:

(0.7/\$3)*100 = 23.33% of the spread