Cybercabs are a game changer, says Mike Khouw. Here's how he's trading Tesla
Cybercabs Hit the Road
Tesla's new Cybercabs are making waves in Northern California, particularly in Palo Alto, where the company's headquarters are located. These futuristic vehicles have no steering wheel and no pedals, a design that's becoming increasingly familiar with the rise of driverless cars like Waymos and the now‑defunct self‑driving Chevy Bolt EV program operated by Cruise. The Cybercab, with its sleek design, appears to be a game‑changer in the industry.
Market Reaction to the Cybercab Launch
The market is reacting positively to the launch, with Tesla's shares closing at nearly $376 after a 5.4% jump on launch day. This is still well below the 52‑week high of around $499. According to Mike Khouw, the market functions as a voting machine, and most options trades represent short‑term votes. The question is how to play it using options.
Technical Indicators Favor Buying a Long Call
Over the past year, the three strongest‑performing technical indicators for Tesla have been MACD, DMI and RSI, all of which are bullish now. That environment favors buying a long call, such as the 50‑delta December 390s, which cost $32.40 per contract—roughly 8.6% of the current stock price. For the trade to be profitable at expiration, the stock must rise above the $390 strike by at least the premium paid.
Options Trading Strategy
To offset the decay, or “theta,” of the long call, Khouw is selling the nearer‑dated 425/330 strangle, which brings in $16.80. The idea is that the Oct 23 strangle will decay faster than the longer‑dated 390 call. If Tesla’s price trades between roughly $330 and $425 by that Friday, the short options expire and the remaining December call is carried at a lower basis.
Managing the Trade
Depending on the stock price at that time, Khouw may roll the short options up or down in price and further out in time. A move higher toward $390‑$410 is the base case: the shorts expire, the long call retains time value, and the position can be reset or rolled. A sharp spike through $425 before Oct 23 would be a strong outcome but would force a decision on the short call—buy it back, roll it up and out, or let assignment occur. A break under $330 would activate the short put, which is not ideal but represents the defined risk of financing with a put.
Comparing to Waymo
The launch is limited, with a small unsupervised fleet, and Waymo already enjoys scale and trip volume that Tesla has not yet matched. The Cybercab is a two‑seater with no cargo capacity, and its unit economics improve only if utilization and regulatory permission both expand quickly. Nonetheless, Khouw notes that few companies have demonstrated the ability to deliver high‑quality EVs at scale better than Tesla.
Source: CNBC · 2026-09-04