How to profit from Hot Money


For those with some extra cash, here's a nice way to trade on Hot Money. As I posted over the weekend, Hot Money -- also known as brokered deposits -- are deposits that pay an interest rate that is 20 percent higher than the industry average. And banks that depend heavily on Hot Money take on much greater lending risk so they can make enough money to pay those higher deposit rates.

You can profit from this by shorting the stock of the most vulnerable hot money banks, while depositing your money in them.