Cash Accounts
In a standard cash account, each trade is fully funded by cash in the account. Cash account trades are subject to PFOF routing to wholesale market makers including Citadel Securities in the same way as any other retail equity trade. The account type does not change the routing decision.
Margin Accounts
Margin accounts allow investors to borrow against their securities holdings. Trades in margin accounts are subject to the same PFOF routing as cash account trades. Margin accounts also generate interest income for brokers, which supplements PFOF as a revenue source. The interaction between margin and PFOF does not create unique execution quality issues beyond those in cash accounts.
IRA Accounts
Traditional IRA, Roth IRA, and SEP IRA accounts held at brokerage firms are subject to PFOF routing for individual stock and ETF trades within the IRA. The tax-advantaged status of IRA accounts does not change the market structure applicable to trades within them. Retail IRA investors have the same execution quality considerations as regular brokerage account holders.
Institutional vs. Retail Account Classification
For regulatory purposes, brokers classify accounts as retail or institutional. Retail accounts — including standard individual accounts, IRAs, and small business accounts — are subject to PFOF routing. Very large accounts or professional investor accounts may be classified differently and may access different routing. The PFOF ecosystem is specifically designed around retail account order flow.