Forex Introducing Broker Glossary

Essential definitions for every term you will encounter as a Forex IB affiliate — from commission models and regulatory bodies to advanced partnership structures.

25terms · Alphabetical order · Updated May 2026

ASIC

The Australian Securities and Investments Commission, the financial regulator for Australia. Brokers licensed by ASIC are subject to strict capital adequacy, segregated client funds, and conduct rules — making ASIC regulation a key trust signal for IBs targeting Asia-Pacific traders.

Churn Rate

The percentage of referred traders who become inactive or stop trading within a given period. A high churn rate erodes recurring revenue share income, making it a critical metric for IBs to monitor and reduce through effective onboarding and engagement.

CPA (Cost Per Acquisition)

A fixed one-time commission paid to an IB for each new client who meets defined criteria — typically completing a minimum deposit and executing a qualifying number of trades. CPA is the most common payment model offered to Introducing Brokers and is especially attractive for IBs with high-converting lead pipelines.

CySEC

The Cyprus Securities and Exchange Commission, the primary regulator for brokers operating under EU MiFID II passporting rights. CySEC-licensed brokers can serve clients across the European Economic Area, making this license highly relevant for IBs targeting European markets.

FCA

The Financial Conduct Authority, the financial regulator for the United Kingdom. The FCA imposes some of the strictest client protection standards globally, including leverage caps and negative balance protection. FCA regulation is widely regarded as a Tier 1 trust marker by traders and IBs alike.

FTD (First Time Deposit)

A referred client who makes their first deposit with a broker after registering through an IB's referral link. FTD counts are the primary trigger for CPA payouts, and many broker programs define minimum FTD amounts (e.g., $100–$500) before a commission qualifies.

Hybrid Model

A commission structure that combines a reduced CPA payment upfront with an ongoing revenue share or rebate on client trading volume. The hybrid model balances immediate income with long-term recurring revenue, making it suitable for IBs with both high acquisition volume and long-retaining client bases.

IB (Introducing Broker)

An individual or entity that refers new clients to a forex broker in exchange for commissions. IBs do not hold client funds or execute trades themselves — they focus on client acquisition, education, and relationship management, earning either CPA, revenue share, rebates, or a combination.

Lifetime Value (LTV)

The total commission an IB earns from a single referred client over the entire period that client remains active with the broker. LTV is the most important long-term metric for IBs on revenue share and rebate programs, as it determines the true worth of each acquisition.

Lot

The standard unit of trade size in forex. A standard lot equals 100,000 units of the base currency. Mini lots (10,000 units) and micro lots (1,000 units) are also common. IB rebate commissions are typically calculated per standard lot traded by referred clients.

Master IB

A top-tier Introducing Broker who has recruited a large network of sub-IBs beneath them in a multi-tier structure. Master IBs earn override commissions on the trading volume generated by their entire downline, enabling passive income at scale beyond their own direct client referrals.

Multi-tier

A commission structure where IBs earn not only from their own direct client referrals but also from clients referred by the sub-IBs they recruit. Multi-tier (or multi-level) programs allow experienced IBs to build leveraged income streams by developing and managing networks of other introducing brokers.

Net Deposit

The total amount deposited by a referred client minus any withdrawals, bonuses, or adjustments made by the broker. Net deposit figures are used by some brokers to qualify CPA payments or calculate revenue share bases, making it essential to understand how a broker defines this metric.

Payment Method

The options available for IB commission withdrawals, which may include bank wire transfer, cryptocurrency, e-wallets (Skrill, Neteller), or broker account credit. Payment method availability directly affects how quickly and cheaply IBs can access their earnings across different regions.

Payout

The process by which a broker transfers earned commissions to the IB's designated account. Payout frequency (daily, weekly, monthly), minimum thresholds, and processing times vary significantly between broker programs and are critical factors when evaluating an IB partnership.

Pip

The smallest standard price movement in a currency pair — typically the fourth decimal place (0.0001) for most pairs and the second decimal place (0.01) for JPY pairs. Pip values determine the monetary impact of spread costs and rebate calculations on referred client accounts.

Rebate

A per-trade or per-lot commission paid to an IB based on the trading volume generated by referred clients, regardless of trade outcome. Rebates are calculated per standard lot and paid continuously as long as clients remain active, making them a reliable recurring income stream for high-volume IBs.

Regulation

The legal framework under which a broker operates, issued by a financial authority such as FCA, ASIC, or CySEC. Broker regulation directly affects client trust, leverage limits, and fund safety — all of which influence IB conversion rates and the long-term retention of referred traders.

Spread

The difference between the bid and ask price of a currency pair, representing the broker's primary source of revenue on non-commission accounts. For IBs on revenue share programs, the spread markup forms the basis of commission calculations — tighter spreads may mean lower IB commissions per trade.

Sub-IB

An Introducing Broker who operates beneath a Master IB within a multi-tier structure. The Master IB earns override commissions on the volume generated by the sub-IB's clients, creating an incentive for senior IBs to recruit, train, and support a network of junior partners.

Tier 1 Broker

A broker regulated by one or more of the most stringent financial authorities globally — typically FCA (UK), ASIC (Australia), CFTC/NFA (USA), MAS (Singapore), or BaFin (Germany). Tier 1 regulation signals the highest standards of client protection, capital adequacy, and operational transparency.

Tier 2 Broker

A broker regulated by mid-tier authorities such as CySEC (Cyprus), FSCA (South Africa), or DFSA (Dubai). Tier 2 regulated brokers are legitimate and audited but operate under somewhat less stringent requirements than Tier 1 regulators, which can affect client trust and conversion for IBs.

Trailing Commission

An ongoing commission that continues to be paid to the IB for as long as a referred client remains active and trading with the broker. Trailing commissions — whether in the form of revenue share or rebates — are the foundation of passive, compounding IB income and represent the highest long-term earning potential.

White Label

A business arrangement where a broker licenses its trading technology, liquidity, and back-office infrastructure to another entity (the white-label operator), who presents the platform under their own brand. Some experienced IBs transition to white-label arrangements to operate effectively as brokers while outsourcing regulatory and infrastructure costs.

Learn More

Compare IB Programs

CPA, revenue share, and rebate rates across 36+ brokers.

IB Academy

Free courses on building and scaling your IB business.

Commission Calculator

Model your monthly earnings with real broker rates.

Get Weekly IB Deals & Rate Updates

Join 2,000+ Forex affiliates. Free broker alerts, commission changes, and exclusive rate boosts.