Forex broker glossary
Plain-English definitions of the terms brokers, white label and grey label operators and prop firms use every day.
This glossary defines the terms forex brokers, white label and grey label operators and prop firms use every day. Each definition is short and links to a longer guide where one exists.
Forex CRM
Back-office software that connects a broker's trading platform to its clients and money: onboarding and KYC, deposits and withdrawals, transfers, IB commissions, support and reporting. See the complete forex CRM guide.
Back office
The staff-facing side of a forex CRM, used to approve KYC and transactions, manage groups and leverage, set IB commissions and review reports.
Traders cabinet (traders room)
The branded client portal where traders register, verify, deposit, withdraw, transfer funds and manage accounts. See the traders cabinet guide.
White label
An arrangement where you operate a trading platform under your own brand while a provider supplies and maintains the underlying infrastructure. See forex white label explained.
Grey label
A lighter, faster form of white label: a defined slice of a provider's server and licence, with your own groups, pricing and brand but fewer configuration options. See the forex grey label guide.
MetaTrader grey label
A grey label on MetaTrader (MT4 or MT5) giving you your own account groups and pricing control on a server the provider runs. See what a MetaTrader grey label includes.
MT5 white label
A branded MetaTrader 5 environment operated under your name on a licensed provider's infrastructure. See the MT5 white label setup process.
Full MT5 license
Your own contract with MetaQuotes and your own server infrastructure for MetaTrader 5, giving maximum control and responsibility. See MT5 white label vs full license.
Manager API
The interface that lets a CRM or cabinet administer a MetaTrader server: creating accounts, changing groups and leverage, processing balance operations and reading trade history. See the MetaTrader API explained.
Account group
A set of MetaTrader accounts that share trading conditions such as markup, spread, commission, leverage and instruments. Group allowances limit how many account types a grey label can offer.
Markup
An amount added to the underlying price by the broker, which widens the spread the client sees and forms part of broker revenue.
Spread
The difference between the bid and ask price of an instrument. Brokers earn from it directly or through markup on top of raw prices.
Commission
A per-lot or per-trade fee charged in addition to, or instead of, spread markup, common on ECN-style accounts.
B-book
A model where the broker keeps client orders in-house and is the counterparty, carrying the market risk. See B-book vs A-book.
A-book
A model where the broker routes client orders to a liquidity provider or the market and earns spread, markup or commission with little market risk.
Hybrid (C-book)
A model that internalises part of client flow and hedges the rest, based on rules the broker defines.
Liquidity provider
A bank, prime broker or institution that supplies prices and executes orders for a broker's A-book flow.
Bridge
Software connecting a trading platform to one or more liquidity providers and applying routing rules.
Data feed
The stream of market prices supplied to a trading server. Some grey label packages include one.
IB (introducing broker)
A partner who refers clients to a broker and earns commission on their trading. See IB and affiliate management.
Affiliate
A marketing partner paid for referrals, often per sign-up, deposit or sale, as opposed to a continuing share of trading revenue.
Multi-level (MLM) structure
A hierarchy of IBs where each level earns commission on the activity of the levels beneath it.
MAM / PAMM
Managed account models in which a manager trades on behalf of investors, allocating results proportionally (PAMM) or by lot or percentage rules (MAM).
Copy trading
Software that automatically mirrors a master trader's positions in followers' accounts. See the forex copytrader guide.
KYC (know your customer)
The process of verifying a client's identity and, where required, address and source of funds before allowing them to trade or withdraw.
AML (anti-money laundering)
Controls and monitoring that help a firm detect and prevent the use of its services for money laundering.
PSP (payment service provider)
A company that processes card and alternative payments so a broker can accept deposits and make withdrawals.
Leverage
The ratio that lets a client control a larger position than their deposited margin. Maximum leverage is limited by regulation in many jurisdictions.
Margin call and stop out
Margin call is a warning that equity is low relative to open positions. Stop out is the level at which positions are closed automatically.
Prop firm (prop fund)
A company that funds traders who pass an evaluation and shares the profits. 'Prop fund' is common shorthand for the same model. See what a prop trading firm CRM needs.
Challenge (evaluation)
A paid test in which a trader must meet profit targets within risk rules to qualify for a funded account. See prop fund CRM and the challenge lifecycle.
Drawdown
The decline in account equity from a peak. Prop firms apply daily and maximum drawdown limits that can fail a challenge.
Profit split
The share of a funded account's profit paid to the trader versus retained by the firm. See prop firm payout automation.