Research preview

The $8.44 trillion now parked in money‑market funds is a record that reshapes the landscape for short‑term capital. While investors scramble for safety, a parallel “arms race” in high‑frequency trading (HFT) continues to extract a hidden tax from every trade. Understanding how latency arbitrage operates and how it interacts with the massive cash pool can help quantitative traders protect profits and anticipate market‑structure shifts. The Scale of Idle Cash and Its Market Impact Money‑market funds have accumulated $8.44 trillion, an amount that dwarfs daily equity turnover in many markets. This pool of low‑yielding assets creates a steady demand for short‑duration, low‑risk instruments such as Treasury bills and commercial paper....