Tesla's Cybercab Launch
Tesla (TSLA) shares fell after the launch of its Cybercab, a car with no brakes, no steering wheel, no pedals, and no mirrors. The company did not live stream the event, unlike past debuts such as the Cybertruck. Tesla registered nearly four dozen Cybercabs in Texas, though a federal filing estimates about 1,000 vehicles have been produced. Public rides began in a limited part of Austin, Texas, with rides to the public rolling out the next day at 5:00 p.m.
The National Highway Traffic Safety Administration (NHTSA) is reviewing the rollout and Tesla's self-certification process, per Reuters, and has opened an inquiry. Because the Cybercab has no steering wheel or foot pedals, regulators have no existing rules to measure it against - they are used to cars with those parts. That review is a main concern hanging over the launch.
The Bull and Bear Views
The media coverage of Elon Musk runs strongly negative even though he is introducing a car that drives you around on its own and does it far cheaper than Waymo (GOOGL). Tesla uses cameras, not radar or LIDAR, which cuts the cost. Musk promised the product by 2025 and a full rollout by 2026, and critics hold him to those dates while he changes how people move. The bull case: trust machines more than human drivers, and the technology is a real breakthrough.
The bear worry centers on reflexes. In a car, your foot wants to reach for a pedal, and those instincts do not go away just because the car drives itself. Full self-driving (FSD) is acceptable; the missing brakes are the sticking point.
The real question is scale. How does Tesla ramp production, win approvals, and put these cars in different cities? The same scaling problem applies to its other bets: the Optimus humanoid robots, which Tesla is ramping and placing into used-vehicle sales. Free cash flow is coming down, and gross margins have fallen for the EV business. Still, autonomous electric cabs look safer than many human drivers on city streets.
Bullish Trade: Unbalanced Call Butterfly
The first trade is a bullish unbalanced (broken wing) call butterfly on TSLA, built for three weeks of duration using the September 25th weekly options. Structure: buy one 355 call (just out of the money, near where the stock traded), sell two 385 calls, buy one 395 call. This is a $30-wide bullish call vertical paired against a $10-wide short call vertical.
The expected move out to September 25th is about $30, aiming for a move back up to 385 - a level the stock nearly hit, reaching 375 recently. The debit was about $7.70 (770) earlier and came in closer to 710-720 as the stock dipped, so entry got cheaper. The debit paid is the risk, about $770 per spread. Break even sits near $362.70, roughly 3.5% above the current share price, so it needs a bigger percentage move to profit. Max profit lands at or near the 385 strike where two options were sold. Even if the stock pushes above 395, the trade still returns more than double. Using the broken wing butterfly instead of a plain 355/385 call vertical lowers the entry cost.
Bearish Trade: Put Calendar
The second trade is a put calendar, neutral to slightly bearish on TSLA. Buy the 340 put in the September 25th weekly options (about $11 out of the money), and sell the same 340 put in the September 11th weekly options, which expire in seven days. This is a two-week-wide put calendar. The debit was about $4.50 (450) and moved closer to 480 as the stock dropped toward the strike, which expands the price. Risk is the $450 debit.
The target is the 340 strike, but the trade stays profitable across a range of roughly 327 to 355, so a full move down to 340 is not required. Today's move is already doing much of the work. The position is long vega and collects theta, so it holds up if the stock sits in the current area. The calendar lets you extend duration if the move does not come right away: as the short option nears expiration over the next seven days, buy it back and roll to another weekly. At-the-money rolls can bring in over $5.50 to $6, so even one adjustment might remove all the risk and push into profit. There is assignment risk on the short 340 put over the next seven days.
