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Brokerage and prop firm glossary.

Plain-language definitions for the terms you'll run into while running a white-label brokerage or prop trading firm. No jargon left unexplained.

Trading & Markets

Spread
The gap between the buy (ask) and sell (bid) price of an instrument. It is how many brokers earn revenue on client trades instead of, or in addition to, a commission.
Leverage
Borrowed exposure that lets a trader control a larger position than their account balance alone would allow, expressed as a ratio like 1:100. Higher leverage magnifies both gains and losses.
Lot size
The standardized unit of a trade. A standard forex lot is typically 100,000 units of the base currency; brokers also offer mini (10,000) and micro (1,000) lots.
Margin
The portion of a trader's balance set aside as collateral to open and hold a leveraged position. Free margin is what remains available to open new positions.
Margin call
An automatic warning (or forced action) triggered when a trader's equity falls close to their used margin, signalling that open positions are at risk of forced liquidation.
Drawdown
The decline in an account's value from its peak, usually shown as a percentage. Prop firms cap maximum drawdown as a core risk rule for evaluations and funded accounts.
Slippage
The difference between the price a trader expects and the price their order actually fills at, usually caused by fast-moving markets or execution latency.
Bid / Ask
The bid is the price a market will buy an instrument from a trader; the ask is the price it will sell at. Traders buy at the ask and sell at the bid.
Pip
The smallest standardized price move for most currency pairs, typically the fourth decimal place (0.0001). Used to quote spreads and profit/loss in forex.
Contract size
The number of units of the underlying asset represented by one lot of a given instrument, varying by asset class (forex, metals, crypto, indices).

Prop Firm & Evaluations

Challenge
A paid evaluation a trader buys and must pass, by hitting a profit target while staying within loss and drawdown limits, before being offered a funded account.
Phase
A stage within a challenge. Many prop firm programs use two phases (Phase 1, Phase 2) before funding; some offer single-phase or instant-funding tracks.
Profit target
The percentage gain a trader must reach in a challenge phase to advance, commonly 8-10% for Phase 1 and slightly lower for Phase 2.
Daily loss limit
The maximum a trader's account may lose within a single trading day before the challenge is automatically failed, resetting at a fixed daily cutoff.
Max drawdown (challenge)
The maximum the account may fall from its starting balance (or, for trailing drawdown, from its highest recorded equity) across the entire evaluation.
Funded account
The live or simulated account a trader receives after passing all challenge phases, from which they can request profit payouts under the firm's split terms.
Payout split
The percentage of trading profit a funded trader keeps versus what the firm retains, commonly 70/30, 80/20, or 90/10 in the trader's favor.
Instant funding
A track that skips the evaluation phases entirely, usually at a higher price, moving a trader directly to a funded account.
Reset / retry
Restarting a failed or in-progress challenge on a fresh account, often at a discount to the original purchase price.

Operations & Compliance

White label
Software built and operated by one company but sold and rebranded by another as if it were their own product, under the reseller's own name and domain.
KYC (Know Your Customer)
The process of verifying a client's identity, typically via government ID and proof of address, before allowing deposits or withdrawals.
AML (Anti-Money Laundering)
Policies and monitoring designed to detect and prevent the use of a platform to disguise the origins of illegally obtained funds.
Tenant isolation
An architecture where each operator's data, clients, and settings are fully separated from every other operator on the same underlying platform.
Back office / CRM
The admin-facing system operators use to manage clients, approve deposits and withdrawals, review trades, and configure platform settings.
IB (Introducing Broker)
A partner who refers clients to a broker in exchange for a commission, typically based on the referred client's trading volume or deposits.
Segregated account
A bank account that holds client funds separately from a company's own operating funds, so client money is protected if the company faces financial trouble.
Liquidity provider
An institution (often a bank or specialist firm) that supplies the tradable prices and depth a broker streams to its clients.

Platform & Technology

Multi-tenancy
A single software system serving many independent customers (tenants), each with isolated data, from one shared codebase and infrastructure.
Trade room
The client-facing interface where trades are actually placed and monitored: charts, order ticket, open positions, and price feed.
WebSocket feed
A persistent connection used to stream live price updates to a browser in real time, instead of the browser repeatedly asking a server for new prices.
RTL (Right-to-Left)
A layout mode required for languages like Arabic and Hebrew, where text and interface elements are mirrored from the default left-to-right layout.
SSL / TLS
The encryption protocol behind the padlock in a browser's address bar, required for any domain handling logins, deposits, or personal data.

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