Points Arbitrage for a Cash Rebate on Award Bookings


There are multiple grey markets for frequent flyer miles and bank points, and just like any other market, you’ll find that different items have different prices (shocker, I know).

Obviously you can use this to your advantage in myriad ways, but let’s talk about what I’d call the travel hacker equivalent of the bull call spread in the derivates market:

The Goal

Let’s say you need to book an AA flight with 7,500 British Airways Avios and you’ve got Ultimate Rewards points ready to go. Of course you could transfer Ultimate Rewards to Avios directly, but that’s not always the best option.

Running the Spread

To illustrate, let’s assume a few spot prices for miles:

  • Ultimate Rewards: 1.27 cents per point
  • ThankYou Points: 1.15 cents per point
  • Membership Rewards: 1.18 cents per point

With those prices in mind, here’s the play:

  • Sell 7,500 Ultimate Rewards at 1.27 cents per point (earn: $95.25)
  • Buy 7,500 Membership Rewards at 1.18 cents per point (pay: $88.50)
  • Transfer the Membership Rewards to British Airways and keep the spread ($6.75)

Is this with your time and the risk for earning enough to buy a decked out Starbucks latte? Almost certainly not. But if you’re talking the number of points needed for La Premier tickets for a couple or JAL F tickets for a family instead of a measly 7,500 Avios, the difference can be significant and may be enough to move the needle.


There are potential pitfalls here: banks don’t want you buying and selling points, markets aren’t always fully liquid, and you have counterparty risk. You’re all adults though right? Just make sure those risks are priced-in should you decide to run the spread.

Happy Wednesday!

A guide to a modestly priced Starbucks latte, pre-inflation.

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