Also known as:minimum pip distance, pip threshold rule, minimum price movement rule
What is Minimum Pip Profit?
Minimum pip profit is a broker rule requiring a client's trade to move a set number of pips before it counts toward an IB rebate or CPA volume target. Trades that open and close inside that pip band are excluded from commission.
The rule exists to stop rebate churning. Without it, an IB or client could open and instantly close trades at near break-even purely to manufacture volume and harvest rebates, costing the broker spread and payout with no genuine trading intent. A typical threshold might be 3-5 pips of movement.
Key takeaways
Trades moving fewer than the threshold pips earn no rebate
Designed to stop rebate churning and no-intent volume
Hits scalpers and 1-2 pip EAs hardest
Two brokers with equal headline rebates can pay very differently
Lives in the IB agreement fine print, not the rebate table
Because the filter is measured in pips, it hits certain strategies hard. Scalpers and high-frequency expert advisors (EAs) that target 1-2 pips per trade may see a large share of their volume disqualified, even though it looks legitimate. A client running 300 lots of 1-pip scalps could generate almost nothing in rebates under a 5-pip rule.
For partners, the number lives in the fine print of the IB agreement. Two brokers can advertise the same headline rebate, but the one with a strict minimum pip profit rule pays far less on the same scalping volume. Reading this clause is essential before promoting any high-frequency strategy.
How it works
For each closed trade, the broker measures the price distance between entry and exit in pips. If that distance is below the minimum pip profit threshold, the trade is flagged as non-qualifying and stripped from the volume that feeds the partner's rebate or CPA calculation.
Brokers apply this alongside related anti-abuse filters such as minimum trade duration and hedging restrictions. Together they target no-risk volume manufacturing. The threshold is usually fixed per account type and disclosed — sometimes buried — in the partner terms rather than the public rebate table.
Why it matters for partnership: Minimum pip profit rules silently void rebates on tight scalps and EA churn. If you market to scalpers, a strict pip threshold can zero out commission on huge volume — read the clause before you promote the offer.
Formula
Qualifying trade if |exit price − entry price| in pips ≥ minimum pip profit threshold
Real World Example
An IB promotes a 1-pip scalping EA to 40 clients on a broker advertising $6 per standard lot. The clients trade 900 lots in a month, but the broker enforces a 4-pip minimum pip profit rule, so roughly 80% of the tightly scalped trades are disqualified. Instead of an expected ~$5,400, the IB is paid around $1,080 — a gap that only becomes visible after reading the agreement and reconciling the volume report.
Anti-churning rules compared
Rule
What it measures
Strategy most affected
Minimum pip profit
Price distance in pips
Tight scalping / 1-2 pip EAs
Minimum trade duration
Seconds a trade stays open
Ultra-fast HFT scalping
Round-turn requirement
Open and close completed
Unclosed / hedged positions
Pro Tip
If you market to scalpers or EA users, ask your affiliate manager in writing for the exact minimum pip profit figure and negotiate to waive or lower it before you drive any volume.
Common Pitfalls
Skipping the minimum-pip-profit clause in the IB agreement, then discovering that hundreds of lots of scalping volume produced almost no commission because the trades never cleared the pip threshold.
FAQ
What is a typical minimum pip profit threshold?
Commonly around 3-5 pips, though it varies by broker and account type. Some brokers set none; strict scalping-averse brokers set higher.
Why do brokers enforce a minimum pip profit rule?
To prevent rebate churning, where trades are opened and closed at near break-even purely to manufacture volume and extract commissions with no real trading intent.
Is minimum pip profit the same as minimum trade duration?
No. Pip profit measures how far price moved; trade duration measures how long the position stayed open. Brokers often apply both together.
Does this rule affect swing traders or investors?
Rarely. Swing and position trades typically move well beyond a few pips, so they clear the threshold easily. It mainly affects scalpers and fast EAs.
Can I get the rule waived for my clients?
Sometimes. High-volume partners can negotiate reduced or waived thresholds, but the broker weighs this against its own spread and hedging costs.
How do I know if a trade was disqualified?
Compare your raw traded volume against the qualifying volume in the IB portal report. A large gap usually points to a pip-profit or duration filter.
A step-by-step framework for calculating how much rebate you can pay traders per lot while keeping a sustainable margin, with a worked three-tier example.
