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Flat fee vs revenue share for synthetic index feeds
How synthetic indices providers charge, and why the model matters more than the headline price.
The two models
Synthetic indices providers generally charge in one of two ways.
- Revenue share with a minimum. The broker pays a monthly minimum plus a percentage of the revenue the synthetic indices generate, usually measured on B-book P&L.
- Flat fee. The broker pays a fixed monthly licence and keeps all of the revenue. This is how Aleatra prices every plan.
How the cost changes as you grow
Annual cost at three revenue levels, using a 20% revenue share as an example and Aleatra's MT5 + FIX plan at US$1,500 a month. Your own terms may differ.
| Monthly synthetic revenue | 20% share, per year | Aleatra MT5 + FIX, per year | Difference |
|---|---|---|---|
| US$10,000 | $24,000 | $18,000 | $6,000 |
| US$50,000 | $120,000 | $18,000 | $102,000 |
| US$150,000 | $360,000 | $18,000 | $342,000 |
When revenue share can make sense
A revenue share can suit a very small broker that wants to test synthetic indices with almost no fixed cost. Once a synthetic desk is producing steady revenue, a flat fee is almost always cheaper, and the gap widens every month the product grows.
Other things to compare
- Exclusivity. Check whether your prices are shared with other brokers.
- Delivery. Confirm support for your setup: MT5 datafeed, FIX 4.4, or both.
- Tick history. Ask how you'd retrieve exact prices for a complaint or audit.
- Minimum term. Look at the commitment you sign up to, not only the monthly fee.