Musk-Trump feud distracts Tesla traders ahead of Robotaxi launch

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Musk-Trump feud distracts Tesla traders ahead of Robotaxi launch.

stock :: 2025-06-11 :: source - bloomberg

Musk-Trump feud distracts Tesla traders ahead of Robotaxi launch. Bloomberg news

By Esha Dey

(Bloomberg) — After years of anticipation and broken promises, Tesla Inc. (TSLA) said its robotaxi service is tentatively set to roll out later this month. Options traders aren’t ready to buy the hype yet.

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Traders had braced for the milestone to come on June 12 — before Chief Executive Officer Elon Musk said late Tuesday the company is aiming for a June 22 launch date — and their positioning in the stock’s options signaled that few expected any fireworks. Options traders priced in a 5.4% move in the stock for the week ending June 13, according to data compiled by Tom Keen, options strategist at Piper Sandler. That’s 24% below the stock’s average realized weekly move over the past 12 months.

Traders instead appear to be more focused on the political drama unfolding between Musk and Donald Trump. Just last week, Tesla shares dropped 23% from peak to trough during the public spat between Tesla’s CEO and the US president.

“It’s all about the fight now,” said Dave Mazza, chief executive officer at Roundhill Financial.

Vishal Vivek, an equity strategist at Citigroup Inc. (C), noted that 1-month option prices for Tesla stock have retraced to median levels relative to the past year. The muted signal stands in stark contrast to the mounting hype around the robotaxi rollout over the past year.

The stock’s skew — a measure of investors’ bullish or bearish tilt — is flat, after last week’s drama spurred a jump in puts as stockholders hedged their bets.

Executives including Musk on Tuesday promoted a video of one of its vehicles driving in Austin with nobody behind the wheel, hinting that the debut in Texas’ capital is coming soon.

Hours later, he revealed the “tentative” date for the launch in a post on X, his social media site.

“We are being super paranoid about safety, so the date could shift,” he said.

Signals Muddied

Strategists said the tension between Musk and Trump has made it hard to gauge how much volatility is expected to come from the launch, and how much reflects the general nervousness around the once-chummy relationship.

The sudden fallout that played out over social media and press conferences triggered the largest one-day wipe-out in Tesla’s market capitalization. Investors worried that an end of a close relationship with the White House will work against Tesla, as the government pursues policies that could put billions of dollars at risk for the company.

In options markets, the volume of bearish put options soared by 375% following the fight, according to data from Barclays, with shares falling 14%. The last time Tesla shares sank that much in a day — amid rising concerns about a slowdown in EV sales — put volume had actually declined and bullish call options held steady, Barclays (BCS) strategists said.

As a result, Tesla’s implied volatility, a measure of expectations for future market swings, is at 65%, the highest of the S&P 500 Index's (^SPX) top 300 stocks, said Rocky Fishman, founder of Asym 500. The company’s option volume has overtaken that of Nvidia Corp. (NVDA), he added.

“The markets are pricing in a lot of movement for Tesla, but there’s so much going on with Musk and Tesla that it’s hard to separate any unique positioning around the robotaxi event,” he said.

Expectations for the robotaxi launch have also been walked back in recent months, especially after Musk told CNBC it was “prudent” to start with a small number of vehicles in Austin. Several Wall Street analysts have expressed doubts in the past week.

Ben Kallo, a longtime Tesla bull at Robert W. Baird, downgraded the stock to the equivalent of a hold rating on Monday, saying he expected the robotaxi business to be more challenging and likely less profitable than the lofty expectations held by several investors. On Friday, Oppenheimer analyst Colin Rusch lowered profit and sales estimates on the company, and said he expected Tesla to require at least one or two more hardware and software updates before delivering reliable performance in vehicle autonomy.

Even with watered down expectations, the success of the robotaxi service remains key for the company to hold onto its steep valuation. Investors’ focus on the technology has sharpened after Musk made a hard pivot toward self-driving last year, even declaring that investors shouldn’t buy the stock if they don’t think Tesla will “solve autonomy.”

However, a lower bar for the rollout means it would take a lot for any big move to materialize in the stock.

“It would take an abject failure to turn the trial into a make-or-break event, while anything short of that could be spun as a step in the right direction,” said Steve Sosnick, chief strategist at Interactive Brokers.

—With assistance from David Marino.