Does this sound like a reasonable idea, and an efficient use of capital for someone who doesn't have a huge amount of cash/margin available?
Short answer, yes, it sounds reasonable.
Longer answer, I'd apply slightly different logic. Note that calendars are my go-to, so I'm a little biased...
Anyway, personally I like starting my calendars as horizontals, with OTM long legs, then as underlying moves up I transition into diagonals to keep the short leg sufficiently OTM. I also really don't like super long dated options as (IMHO) the whole point of trading options is to leverage fluctuation in the Greeks, and the farther the date, the less The Greeks really fluctuate. I really prefer to keep mine within 6-12 months because price performance is and the magnitude of greek fluctuations is higher, but I also don't hold any particular position for a very long time (Very long for me = months). I can appreciate that one might want to notionally hold through to long term gains; when I've been in that space I've targeted 15 months...18 at the most. Nobody in their right mind would hold a long call until expiration, so at 12 months I'll usually close or roll the position. But, some folks find value in very long dated long options--they most emulate stock--and if that's your objective then there's nothing wrong with the super long expirys.
Here's some benefits of the long leg being entered OTM vs DITM:
--The lower cost gets you more initial ∆ per dollar. While the $600 March 23 is $443 right now with .81 ∆, the March 23 $1000 is $329 with .67 ∆, or (bxr's math willing) about 11% better delta/dollar. That manifests as less portfolio exposure for the same number of calls, or more position ∆ for the same amount of portfolio exposure (you buy more calls for the same amount of money). That's a pretty important factor, as buying more calls allows you to sell more calls (That are covered), improving both total returns and returns vs initial capital from the short legs. You're presumably still selling the same strike price as you would with the DITM long leg, so by having more long calls you're literally increasing your short leg returns by multiples.
--The OTM strike gets you more favorable ∆ and volatility profiles relative to underlying movement. The Greeks are not fixed values, they ebb and flow with a number of variables, underlying price being a big one. Depending on where your strike is relative to underlying, and depending on The Greek determines where you are on those sometimes conflicting ebbing and flowing curves. Importantly for ∆ and volatility, as underlying moves in your direction the profile of those impacts becomes progressively more favorable, so you make more and more as you get closer to the money. Even more Importantly, the profile of those impacts becomes progressively less detrimental with unfavorable moves in underlying. That's A Good Thing.
For the short leg, I don't particularly like the strike being closer to the money than the long leg, so its sort of a balance trying to find the right horizontal strike point. For round numbers, maybe I'd look at something like a $1000 right now for a long term position? I don't mind being a little agressive on the strike from that perspective, because while the P/L does start to drop as underlying moves above the strike, it doesn't do so too steeply, so there's time to recover, either by rolling the short legs out or by pulling the rip cord on the whole position. Also, going farther OTM on the strike means the short leg cycles pay out less, so there's a whole balance to be found in there with no one right answer.
As far as maintenance/rolling goes, its mostly about keeping the short leg strike a comfortable distance OTM. See above posts for some back and forth logic on that. Longer term, assuming it was a good position and the long leg has ended up ITM, I won't keep it there for long, and certainly not DITM for long. I'll roll the DITM to a higher strike based on the above entry logic, likely splitting into more contracts and/or potentially also scraping some realized profit off the position.
For the record: I am on week two of a couple of horizontal $900 spreads, playing weeklies on the short legs and March on the long legs. I paid $7850 for the long legs and so far have burned off ~$2600 from each of them. I'll be closing by end of February regardless (or at least rolling out) when I expect to--worst-case--have fully paid off the long legs. That makes my probable worst case a break even (Obviously if TSLA tanks 50% I'm SOL) and any value in the position at that point is profit.
