Basically he's getting a 3.5 percent Div..As long as he is a long term holder and happy with a double from here,why not.. If he looking for downside protection,that's not the strike. Only slight negative is vol is CHEAP
Generally, folks would prefer a faster-eroding product, but there is no absolute right/wrong. Watching a leap erode is watching paint dry.
In the current state of things, you'll regret it. I don't want to explain why, because that'd make all the newbies in this thread better option traders.
Most sell premium to burn theta and theta burns best inside 90 days. The only reason I would ever sell a leap call would be if the premium was really fat and part of a leap spread but that is just me. We all trade different but it isn't any strategy I employ. 100% of my covered calls are sold with less than 60 dte and typically as part of a straddle or strangle.
I'll share three strategies I've used over the last 15 years for leaps...2 have worked and 1 fell flat on it's face. The first one was the flat on the face...Everyone loves hearing about the disasters!! About 2008 I bought GM...At $44...Good earnings, good dividend...What could go wrong?? Did a fair covered call. It may not have been a leap (maybe 9 month type of thing). Recession hit...Union employees wouldn't reduce their wages in major ways. I sell the stock for $1 about a year later. Bush, then Obama walks GM (and Chrysler) into bankruptcy. My dad always told me that the US government would go under before GM...He was wrong!! The next two are profitable. The Covid pandemic hit the US in March 2020. Boeing drops below $180. a share. Airlines were not flying and not ordering planes. I buy Boeing for $179.?? Then do a leap for $180. over a year out. I got over $21. per share for this leap. Just felt the company would not fall apart. I treated this more like a high paying bond than an option. About 6-9 months later it got called away at $220 something...Didn't really care. I made a good, fairly quick return for my leap. I did the same with BABA years ago...I wouldn't do it with BABA at this time. But, back then good profit. It was pretty much the same...Bought at $179.?? and optioned the $180.s over a year out. The last one is still a "we'll see". I bought Apple at $125.03...In June of this year. I then did a leap for Jun 22 $160...I got $4.40 ($440.) for this leap. I got ripped to shreds here on this board for selling the leap so cheap. I was fine with it. Not worried about the slow decay. Will collect the dividend. Apple hit an all time high today (currently at $153.85). If it gets called away I will be fine with it. Gain my option money, dividend, price improvement (125. to $160), and the interest from the option and dividend money working in other investments. I'll be fine with the stock rising above $160. and the stock gets called away early...Let the buyer collect the upcoming dividend (or something like that). This is how I play leaps. Just me...
A key component of the covered call strategy is leveraging time decay in your favor. Selling very long dated calls defeats that purpose. That said, your approach neatly reduces your net delta on the TSLA shares. But unless you're holding the shares for tax reasons, why cut off all the upside on a high flyer?