Buying ROKU put contracts.

Roku Inc. (ROKU) is a streaming video platform with billions of hours of content broadcast each year.

The company is not profitable — and not expected to BECOME profitable in the foreseeable future.

Competition remains fierce in the streaming media industry and ROKU does not appear to have a strategic advantage. The company is valued near $7 billion despite losses and a rising interest rate environment.

Today’s Fed decision and commentary from Jerome Powell points to further interest rate hikes. This environment is exceptionally challenging for stocks of companies that don’t earn a profit and may need to tap markets for additional capital.

Shares of ROKU remain near 52-week lows and could fall farther thanks to the continued hawkish stance by the Fed.

Buying put contracts gives us a chance to add more bearish exposure to our portfolio and profit from continuing declines from this weak stock.