Forex & Introducing Broker Terms

A forex affiliate or IB commission model that pays the partner a share of the spread markup the broker captures on every trade executed by a referred client, accruing continuously with trading activity.

A formal commercial relationship between a forex broker and an introducing broker, governing how the IB refers clients, what commission the IB earns, and the regulatory and contractual obligations both parties carry.

A network in which multiple forex brokers are integrated into a single affiliate or IB program, allowing partners to route traffic to specific brokers while commission flows back through a shared platform.

An Introducing Broker is a partner who refers new traders to a Forex or CFD brokerage in exchange for ongoing commissions, typically calculated on the trading volume or revenue generated by those referred clients.

Lot-based commission is a broker affiliate or IB payout model where partners earn a fixed amount for each traded lot generated by their referred clients.

A Sub-IB is an introducing broker recruited by another IB (the master IB) rather than directly by the broker. Sub-IBs operate under a multi-tier structure where commissions cascade from the broker through the master IB layer.

A Master IB is an introducing broker who recruits and manages a network of Sub-IBs beneath them. The Master IB earns override commissions on the trading volume generated by their downstream partners in addition to commissions on their own direct referrals.

An IB rebate is a payment that an introducing broker passes back to referred clients, typically funded from the IB's own commission share. Rebates are used to attract and retain active traders by reducing their effective trading costs.

A commission model in Forex IB programs where the introducing broker earns a portion of the spread (the difference between bid and ask price) on every trade their referred clients execute.

Lot-based commission pays a fixed amount per traded lot. Spread-based commission pays a share of the spread markup on each trade. The core difference is whether IB compensation is tied to trading volume or to the broker's actual revenue per trade.

A PAMM (Percent Allocation Management Module) account is an investment model in Forex where a money manager trades on behalf of multiple investors, with profits and losses distributed proportionally based on each investor's share of the pool.

A signal provider is a trader or service that shares trading signals or enables copy trading, earning referral commissions when followers open brokerage accounts or generate trading volume through the broker.

A pip rebate is a commission structure where introducing brokers earn a fixed amount per pip of spread on each trade executed by their referred traders, with the broker adding a markup to the spread to fund the rebate.

Trading volume is the total amount of trading activity -- measured in lots or monetary value -- generated by a trader or group of traders over a given period.

The spread is the difference between the bid (sell) and ask (buy) price of a financial instrument, serving as a primary revenue source for Forex brokers and a basis for spread-based affiliate commissions.

The monetary value of a single pip movement in a forex trade, which varies by currency pair, lot size, and account currency. Pip value is used as a basis for calculating IB commissions in spread-based and pip rebate models.

A portion of the spread or commission returned to the end client (trader) by the broker or introducing broker as an incentive to trade through a specific partner channel.

CPA pays a fixed amount per qualified trader acquisition; lot-based pays ongoing commission per traded lot. The core difference is whether the broker compensates the IB for acquisition or for ongoing trading activity.

An IB agreement is the formal contract between a forex broker and an [introducing broker](/glossary/introducing-broker) that defines the commission structure, payment terms, compliance obligations, client ownership rules, and termination conditions governing the partnership. It is the legal foundation that specifies how the IB earns revenue and what responsibilities each party assumes.

An IB portal is a self-service web interface provided by a broker to its [introducing brokers](/glossary/introducing-broker), giving them access to performance data, commission reports, tracking link generation, [sub-IB](/glossary/sub-ib) management, and marketing materials. It serves as the primary operational tool through which IBs monitor their referral activity and manage their partnership.

Leverage allows traders to control a larger position size with a smaller capital outlay, amplifying both potential gains and losses proportionally.

Copy trading lets users automatically replicate the trades of experienced traders, creating a distinct affiliate acquisition channel for brokers and prop firms.

PAMM pools investor funds into one account managed by a money manager. MAM keeps investor funds in separate sub-accounts with individual risk controls and allocation flexibility.

A MAM account lets a money manager place trades across multiple client sub-accounts simultaneously, with each client's allocation and results calculated independently.

A swap rate is the interest charged or credited for holding a leveraged forex position overnight, based on the interest rate differential between currencies.

A margin call is a broker notification triggered when a trader's account equity falls below the required maintenance margin, risking position liquidation.

A forex spread markup is an additional pip value added to the base spread by a broker, often used to fund IB commissions or revenue sharing.

A forex affiliate program compensates partners for referring traders to a broker, typically through CPA, lot-based commissions, or hybrid IB structures.

A swap-free account is a trading account that eliminates overnight interest charges, designed for traders whose beliefs prohibit earning or paying interest.

Lot size is the standardized unit of measurement for a trade in forex, defining the number of currency units bought or sold in a single transaction.

MetaTrader integration connects a broker's MT4 or MT5 trading platform to its affiliate or IB management system for automated commission tracking and reporting.

A Forex IB manages ongoing client relationships and earns from trading activity. A Forex affiliate drives referrals and earns per conversion. The key difference is depth of involvement.

An ECN broker routes client orders directly to liquidity providers via an electronic communication network, offering variable spreads and transparent pricing.

A liquidity provider is a financial institution or entity that supplies buy and sell quotes to brokers, enabling trade execution at competitive spreads.

MT4 and MT5 are MetaTrader trading platforms with different capabilities—MT4 dominates forex while MT5 supports multi-asset trading and newer features.

An STP broker routes client orders directly to liquidity providers without a dealing desk, earning revenue through spread markups or commissions.

STP brokers route orders to liquidity providers with a spread markup. ECN brokers provide direct order book access with per-trade commissions.

A market maker broker acts as the counterparty to client trades, setting its own bid/ask prices rather than routing orders directly to the interbank market.

A-Book brokers pass client orders to external liquidity providers, while B-Book brokers take the other side of client trades internally. The model affects spreads, execution, and IB economics.

Margin level is the ratio of equity to used margin in a forex trading account, expressed as a percentage, that determines ability to open new positions.

A forex broker is a financial intermediary that provides retail and institutional traders with access to currency markets, executing trades on their behalf against liquidity.

In forex affiliate and IB programs, CPA pays a fixed fee per qualified depositor while RevShare pays ongoing commissions on referred trader volume. The right model depends on your traffic profile and retention expectations.

Margin trading allows a trader to open positions larger than their account balance by borrowing capital from a broker, using their own funds as collateral (margin) against the position.

Slippage is the difference between the expected price of a trade and the actual execution price, caused by market volatility or low liquidity.

A currency pair is the quotation of two currencies where one is traded against the other, forming the basis of all forex trading and IB commission calculations.

A CFD is a derivative contract where traders speculate on price movements of an underlying asset without owning it, settling the difference in cash.

An IB network is a multi-tier structure where a master introducing broker recruits sub-IBs, earning override commissions on the trading volume they generate.

A forex white label is a pre-built trading platform and infrastructure that an operator rebrands as their own brokerage.

ECN brokers route orders to external liquidity providers for execution, while market makers fill orders internally against their own book.

Negative balance protection is a regulatory safeguard ensuring a trader's account cannot fall below zero, limiting losses to deposited funds.

An IB management platform is software that automates introducing broker onboarding, commission calculation, sub-IB hierarchies, and payout processing for forex operators.

An IB portal serves introducing brokers with trade-level data and sub-IB management, while an affiliate portal focuses on click-to-conversion attribution and campaign reporting.

MiFID II is the EU regulatory framework governing investment services, including forex brokers and introducing broker programs, setting rules for client protection, transparency, and partner compensation.

PAMM pools investor funds into a single managed account with proportional profit distribution. Copy trading replicates a signal provider's trades across individual follower accounts. Both create affiliate referral opportunities but with different commission mechanics.

A stop-loss order automatically closes a trading position when the price reaches a predefined loss threshold, limiting downside risk.

An Expert Advisor is an automated trading program that runs on MetaTrader platforms, executing trades based on predefined rules without manual intervention.

Demo accounts use virtual funds for practice trading, while live accounts use real money with actual market execution. The transition affects risk, psychology, and affiliate attribution.

Market execution is an order processing model where trades are filled at the current available market price without requotes, used by ECN and STP brokers to provide direct market access.

Master IBs recruit and manage downstream partner networks while earning override commissions. Sub-IBs refer traders directly and operate under a Master IB's umbrella.

Hedging is the practice of opening offsetting positions to reduce exposure to adverse price movements in forex, sports betting, or other financial markets.

A micro lot is 1,000 units of base currency in forex trading, equal to 0.01 standard lots. It affects pip value, margin requirements, and IB commission calculations.

A take profit order automatically closes a trade when it reaches a specified profit level, locking in gains without requiring manual intervention.

Hedging reduces risk by opening offsetting positions, while scalping seeks small, frequent profits from rapid trade execution. Each strategy generates different trading volume patterns for IB commissions.

A minimum volume requirement is a trading volume threshold that a referred client must reach before an IB or affiliate qualifies for commission payment.

Social trading is a broad model where traders share ideas and strategies on a platform, while copy trading automatically replicates another trader's positions.

A trading platform is the software interface through which traders execute orders, analyze markets, and manage positions with a forex broker or prop firm.

IB onboarding is the process of registering, verifying, and activating introducing brokers within a forex affiliate program.

A multi-asset broker offers trading across multiple instrument classes — forex, CFDs, stocks, commodities, indices, and crypto — under a single platform and account.

Fixed spreads remain constant regardless of market conditions, while variable spreads fluctuate with liquidity and volatility — each model affects IB commission calculations differently.

The total cost a forex broker incurs to acquire one active trading client, including affiliate commissions, paid media, onboarding, and compliance costs.