Forex & Introducing Broker Terms

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.