The December 40 calls are selling for around $1.00. A $2+ move by the end of the year doesn't seem to be realistic (based on how far we have come). If it does hit $40, you are paid $2+ more for the stock (based on today's close) plus the $1 option price plus 2 dividends ($1.17). That's about 12% return by the end of the year based on today's close.
The down side seems to be that the option expires and the stock is not called. In that case you get to keep this great company for the long term.
I think an options 'collar' strategy works pretty well here as a hedge: Sell the 40 call and buy the 40 put...essentially brings the cost of the put down to a reasonable level. The risk of the stock getting called at 40 is very minimal, IMO.
The stock is vulnerable at this point, not because of fundamentals but simply because of price and interest rates.
Seems like a good play to me, as long as you are OK with sitting through any (more) downdrafts. The dollar premium you get doesn't give you much downside protection. Looking at upside risk, I agree, the stock is not likely to go where your stock will get called away.
Might be good, if you are worried about downside protection, to sell the calls and buy some puts with the premium, or at least let that dollar help offset the cost of puts.
Personally, I am unhedged again and looking for a way to hedge, but the puts are so expensive.
I agree that the puts are too expensive. I have held MAA since 1997 (more at some times and less at others), so weathering any downturns is "old hat" for me. Actually, if we experienced a pullback like we saw recently, I would most likely be a buyer and not a seller.