Forex IB Glossary – 50 Terms Every IB Should Know

If you're working as an IB or planning to partner with a forex broker, getting familiar with the key terms is a must. From how rebates are calculated to how client volume is tracked, the language used in this business can be specific and sometimes confusing at first. 

This glossary breaks down 50 important terms that come up regularly in IB agreements, portals, and day-to-day communication. 

It’s built for partners who want to work smarter, understand how the model works, and avoid missteps.

IB Basics and Structure Terms

1. Introducing Broker (IB)
An individual or company that refers clients to a broker and earns commissions based on the clients' trading activity.

2. Master IB
An IB who also refers other IBs (sub-IBs) and earns additional commissions from the trading volume generated by those sub-IBs' clients.

3. Sub-IB
A partner who works under a master IB. Sub-IBs refer clients directly and earn full commissions from those clients, while the master IB receives a smaller override.

4. Affiliate
A marketing partner who promotes a broker online, often using CPA (cost per acquisition) models. Some affiliates also work as IBs if they focus on traders instead of just leads.

5. CPA (Cost Per Acquisition)
A fixed payment the broker gives to a partner for each qualified client who meets specific criteria, such as completing a deposit or trading at a set volume.

6. Revenue Share
A payout model where the partner earns a percentage of the revenue generated from the referred client's trading activity.

7. Rebate
A per-lot or per-trade commission paid to the IB based on the volume traded by their referred clients. Rebates are often the main earning model in IB programs.

8. Spread Markup
An increase added by the broker (or the IB) to the base spread of an instrument. The markup becomes part of the IB’s earnings.

Some brokers prefer not to charge extra markup, since it’s sort of a hidden charge.

9. Commission
A fee charged by the broker per trade (often per lot) that may be shared with the IB as part of the revenue model.

10. Lead
A potential client who has shown interest in opening a trading account. Leads may come from sign-up forms, affiliate links, or events and can be tracked in the IB portal.

Quick Check: How IB Structures Work?

Question:
An Introducing Broker (IB) refers clients to a regulated forex broker. One of those clients becomes highly active and eventually qualifies to become a sub-IB. Which of the following scenarios best reflects how commissions and responsibilities typically shift in a proper multi-tier IB structure?

A) The original IB loses all future commissions, and the sub-IB becomes fully independent.
B) The original IB continues to earn commissions from referred clients but no longer has a role.
C) The client becomes a sub-IB, earns direct commissions on new clients, and the original IB (now a master IB) earns an override from the sub-IB's client volume.
D) Both IB and sub-IB must split one rebate amount equally from all future client trades.

Correct Answer:
C) The client becomes a sub-IB, earns direct commissions on new clients, and the original IB (now a master IB) earns an override from the sub-IB's client volume

Explanation:
In most multi-tier IB setups, when a client becomes a sub-IB, they start earning full commissions from the clients they personally refer. The original IB who brought them in becomes a master IB and starts earning an override commission. This is typically calculated as a percentage of what the sub-IB earns and is paid directly by the broker. The original IB does not lose their existing clients or commissions. This layered structure helps brokers grow networks while keeping rewards fair.

Partner & Client Tracking Terms

11. Referral Link
A unique tracking link assigned to each IB or affiliate. It helps the broker identify which clients were referred by which partner.

12. Tracking ID
An optional code added to referral links to track the source of traffic or campaigns, useful for partners running multiple ads or promotions.

13. Conversion Rate
The percentage of leads who complete a desired action, such as registering, depositing, or starting to trade. A key metric for evaluating partner performance.

14. First-Time Deposit (FTD)
The first deposit made by a referred client. Often used as a benchmark for CPA payments or as a sign of lead quality.

15. KYC (Know Your Customer)
A regulatory process where clients must verify their identity and address before they can trade or withdraw funds. KYC status often affects whether a referral is considered “active.”

16. Client Retention
The ability to keep referred clients trading over time. Brokers and IBs both track this to measure long-term value, not just first-time activity.

17. Active Client
A referred trader who meets minimum trading or deposit activity within a defined period. Active client counts affect IB payouts and performance metrics.

18. Volume Traded
The total number of lots traded by a referred client. Most rebate structures are based on this metric.

19. MT5 Tracking
Refers to the way MetaTrader 5 platforms record and report trading volume and activity for client accounts linked to a partner.

20. Partner Dashboard
The back-office system where IBs manage their clients, track trading volume, monitor commissions, and access promotional tools.

Quick Check: Partner & Client Tracking

Question:
Which of the following actions would most likely improve an IB's conversion rate in a real-world scenario?

A) Increasing leverage for existing clients
B) Adding a tracking ID to referral links to test different campaigns
C) Lowering the spread on exotic pairs
D) Delaying KYC verification to speed up registration

Correct Answer:
B) Adding a tracking ID to referral links to test different campaigns

Explanation:
Tracking IDs help IBs understand which campaigns, channels, or ads are converting better. By monitoring the conversion rate tied to each tracking ID, partners can optimize their marketing strategies. This is a core tactic used by professional IBs and affiliates. The other options either involve client-side trading conditions or violate compliance procedures.

Payout & Commission Terms

21. Lot (Standard, Mini, Micro)
A unit that measures trading volume. 1 standard lot equals 100,000 units of the base currency. Mini lots are 10,000 and micro lots are 1,000. IB commissions are usually based on lots traded.

22. Commission Per Lot
The fixed amount an IB earns for every lot traded by their referred clients. This can vary depending on the broker, account type, or instrument.

23. Tiered Payout
A commission structure where partners earn more as they reach higher trading volume or referral milestones. Some brokers apply this to both client and sub-IB performances.

24. Override Commission
The extra commission a master IB earns from the trading activity generated by their Sub-IBs’ clients.

25. Withdrawal Threshold
The minimum amount of commission an IB must earn before they can request a payout. This varies by broker and payout method.

26. Payment Cycle
The schedule on which IBs receive their earnings, typically daily, weekly, or monthly depending on the broker.

27. Revenue Cap
Some brokers set a maximum limit on the amount a partner can earn per client, especially in CPA or hybrid models.

28. Chargeback
When a broker reverses a commission payment, usually because a referred client didn’t meet the required conditions or engaged in prohibited activity.

29. Negative Balance Protection
A feature that protects clients from going into debt due to extreme market moves. While not directly related to IBs, it can affect client retention and risk communication.

30. Broker Spread
The difference between the bid and ask price of an instrument. IBs often earn a percentage of the spread as part of their commission structure.

Quick Check: Payout & Commission Terms

Question:
A master IB earns $3 per lot from the trading activity of clients referred by their sub-IBs. The sub-IB receives $10 per lot. If the broker pays these amounts separately, what does this tell you about the commission structure?

A) The sub-IB is losing $3 per lot to the master IB
B) The broker is overpaying by $13 per lot
C) The commission model uses fixed overrides, not revenue splitting
D) Both IBs are receiving the same commission, just split unevenly

Correct Answer:
C) The commission model uses fixed overrides, not revenue splitting

Explanation:
In a fixed override structure, the sub-IB keeps their full rebate, and the broker adds an extra payout to the master IB as an incentive. The sub-IB’s earnings are not reduced. This setup is common in two-tier IB programs and is broker-funded rather than a revenue share between partners. zForex IB program follows this model, allowing master IBs to grow their networks without affecting the income of their sub-IBs, making it an equally beneficial structure that encourages long-term collaboration.

Platform and Trading-Related Terms

31. MetaTrader 4 (MT4)
One of the most widely used trading platforms in forex. Many brokers still support it, though it's gradually being replaced by MT5.

32. MetaTrader 5 (MT5)
A newer and more advanced trading platform compared to MT4. Supports more instruments, faster order execution, and multi-asset trading.

33. cTrader
An alternative to MetaTrader platforms, known for its clean interface, depth of market (DOM) view, and ECN-style order execution.

34. TradingView
A browser-based charting platform some brokers integrate for analysis. While it's not used for order execution, it’s popular among traders for strategy planning.

35. ECN (Electronic Communication Network)
A broker model where client orders are matched directly with liquidity providers. It offers tighter spreads and direct market access.

36. STP (Straight Through Processing)
A type of broker execution where trades are passed directly to the market without dealing desk intervention. Common in transparent pricing models.

37. Leverage
The ability to trade with more capital than you deposit. For example, 1:100 leverage means $1,000 margin allows a $100,000 trade. Higher leverage may attract clients, but also increases risk.

38. Swap / Rollover
An interest fee or credit applied when a position is held overnight. Some clients may ask about “swap-free” or Islamic accounts to avoid this.

39. Margin Call
A warning that the client’s account doesn’t have enough equity to support open positions. If ignored, it can lead to automatic position closure.

40. Instrument / Symbol
The specific asset available for trading, such as EUR/USD, XAU/USD, BTC/USD. IBs often earn different commission rates depending on the instrument.

Quick Check: Platform & Trading

Question:
Which platform feature is most likely to attract clients who rely heavily on price precision and execution speed?

A) Bonus campaigns and swap-free options
B) Compatibility with TradingView chart templates
C) ECN execution and depth of market (DOM) access
D) Large variety of demo contests and social tools

Correct Answer:
C) ECN execution and depth of market (DOM) access

Explanation:
Clients who prioritize speed, price accuracy, and order depth often prefer ECN-style execution with full access to market depth. This setup offers greater transparency and is well-suited for scalpers and algorithmic traders. zForex supports the cTrader platform, including cTrader Copy, which allows users to follow and automatically copy top-performing strategies with ease. While bonuses and contests may appeal to beginners, experienced traders tend to value the advanced features and flexibility that ECN trading provides.

Legal, Compliance & Reporting Terms

41. IB Agreement
The official contract between the broker and the partner. It outlines terms, commission structure, responsibilities, and compliance obligations.

42. NDA (Non-Disclosure Agreement)
A legal agreement that prevents partners from sharing confidential broker information, especially during early-stage discussions or custom deals.

43. Compliance Check
The broker’s internal review to ensure that an IB is following rules around marketing, client communication, and ethical promotion practices.

44. AML (Anti-Money Laundering)
Regulations designed to prevent the use of brokerage services for money laundering. IBs may need to understand and support AML procedures when referring clients.

45. Regulated Broker
A broker licensed by a financial authority (like CySEC, ASIC, FCA). IBs working with regulated brokers often have more credibility with clients.

46. License Number
The registration ID issued by a regulator to the broker. Clients sometimes ask for this as part of their due diligence.

47. Reporting Period
The time frame used to calculate commissions, could be daily, weekly, or monthly depending on the broker.

48. Partner Terms & Conditions
The detailed set of rules that IBs must follow when working with the broker. Covers everything from payout terms to promotional restrictions.

49. Risk Disclosure
A document that explains the risks of trading leveraged products. Many brokers require IBs to make sure clients have seen or accepted this.

50. White Label / IB White Label
A model where a partner can offer brokerage services under their own brand, while using the infrastructure and licensing of a larger broker. Often available to top-performing Master IBs.

Quick Check: Legal, Compliance & Reporting

Question:
An IB launches an ad campaign targeting a restricted country where the broker is not licensed. What is the most likely outcome?

A) The IB will get a warning but keep their commissions
B) The broker will reduce payout percentages for the campaign
C) The broker may terminate the partnership for compliance violation
D) The campaign will still run, as long as clients pass KYC

Correct Answer:
C) The broker may terminate the partnership for compliance violation

Explanation:
Most brokers have strict compliance rules about where and how IBs can promote their services. Running ads in restricted regions or misrepresenting the broker’s regulatory status can lead to penalties, loss of commissions, or immediate termination of the IB agreement. This is clearly outlined in most partner terms and conditions.

Final Thoughts on IB Partnerships

Understanding the IB business takes more than just sharing a referral link. Knowing the key terms, how the structure works, and how commissions are paid helps you operate more confidently and professionally. 

At zForex, strong IB partnerships are built on transparency, trust, and long-term potential. The program is designed to empower partners with real-time dashboards, multi-tier commission structures, and flexible withdrawal options, everything needed to run and grow a serious referral business. With a system that rewards consistency and performance, zForex offers a space where partners can focus on building genuine connections and turning expertise into results.

This glossary gives you a solid foundation, but it’s just the starting point. The most successful IBs often come from a trading background. They use their experience to build stronger relationships, speak the trader's language, and turn that knowledge into a growing business. Keep learning, stay close to the markets, and apply what you know.