{"id":7812,"date":"2023-06-21T04:00:00","date_gmt":"2023-06-21T10:00:00","guid":{"rendered":"https:\/\/milesearnandburn.com\/?p=7812"},"modified":"2023-06-19T20:43:44","modified_gmt":"2023-06-20T02:43:44","slug":"points-arbitrage-for-a-cash-rebate-on-award-bookings","status":"publish","type":"post","link":"https:\/\/milesearnandburn.com\/index.php\/2023\/06\/21\/points-arbitrage-for-a-cash-rebate-on-award-bookings\/","title":{"rendered":"Points Arbitrage for a Cash Rebate on Award Bookings"},"content":{"rendered":"\n<h4 class=\"wp-block-heading\">Introduction<\/h4>\n\n\n\n<p>There are multiple grey markets for frequent flyer miles and bank points, and just like any other market, you\u2019ll find that different items have different prices (shocker, I know). <\/p>\n\n\n\n<p>Obviously you can use this to your advantage in myriad ways, but let\u2019s talk about what I\u2019d call the travel hacker equivalent of the <a href=\"https:\/\/www.investopedia.com\/terms\/b\/bullcallspread.asp\" class=\"ek-link\">bull call spread in the derivates market<\/a>:<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">The Goal<\/h4>\n\n\n\n<p>Let&#8217;s say you need to book an AA flight with 7,500 British Airways Avios and you&#8217;ve got Ultimate Rewards points ready to go. Of course you could transfer Ultimate Rewards to Avios directly, but that&#8217;s not always the best option.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Running the Spread<\/h4>\n\n\n\n<p> To illustrate, let&#8217;s assume a few spot prices for miles:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Ultimate Rewards: 1.27 cents per point<\/li>\n\n\n\n<li>ThankYou Points: 1.15 cents per point<\/li>\n\n\n\n<li>Membership Rewards: 1.18 cents per point<\/li>\n<\/ul>\n\n\n\n<p>With those prices in mind, here&#8217;s the play:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Sell 7,500 Ultimate Rewards at 1.27 cents per point (earn: $95.25)<\/li>\n\n\n\n<li>Buy 7,500 Membership Rewards at 1.18 cents per point (pay: $88.50)<\/li>\n\n\n\n<li>Transfer the Membership Rewards to British Airways and keep the spread ($6.75)<\/li>\n<\/ul>\n\n\n\n<p>Is this with your time and the risk for earning enough to buy a decked out Starbucks latte? Almost certainly not. But if you\u2019re 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. <\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Caveats<\/h4>\n\n\n\n<p>There are potential pitfalls here: banks don\u2019t want you buying and selling points, markets aren\u2019t always fully liquid, and you have counterparty risk. You\u2019re all adults though right? Just make sure those risks are priced-in should you decide to run the spread. <\/p>\n\n\n\n<p>Happy Wednesday!<\/p>\n\n\n<div class=\"wp-block-image is-style-editorskit-rounded\">\n<figure class=\"aligncenter size-full is-resized\"><img decoding=\"async\" src=\"https:\/\/milesearnandburn.com\/wp-content\/uploads\/2023\/06\/image-5.png\" alt=\"\" class=\"wp-image-7820\" width=\"420\" srcset=\"https:\/\/milesearnandburn.com\/wp-content\/uploads\/2023\/06\/image-5.png 470w, https:\/\/milesearnandburn.com\/wp-content\/uploads\/2023\/06\/image-5-196x300.png 196w\" sizes=\"(max-width: 470px) 100vw, 470px\" \/><\/figure>\n<\/div>\n\n\n<p class=\"has-text-align-center\" style=\"font-size:14px\">A guide to a modestly priced Starbucks latte, pre-inflation.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Introduction There are multiple grey markets for frequent flyer miles and bank points, and just like any other market, you\u2019ll find that different items have<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_editorskit_title_hidden":false,"_editorskit_reading_time":0,"_editorskit_is_block_options_detached":false,"_editorskit_block_options_position":"{}","footnotes":""},"categories":[1],"tags":[],"class_list":["post-7812","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/milesearnandburn.com\/index.php\/wp-json\/wp\/v2\/posts\/7812","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/milesearnandburn.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/milesearnandburn.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/milesearnandburn.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/milesearnandburn.com\/index.php\/wp-json\/wp\/v2\/comments?post=7812"}],"version-history":[{"count":9,"href":"https:\/\/milesearnandburn.com\/index.php\/wp-json\/wp\/v2\/posts\/7812\/revisions"}],"predecessor-version":[{"id":7822,"href":"https:\/\/milesearnandburn.com\/index.php\/wp-json\/wp\/v2\/posts\/7812\/revisions\/7822"}],"wp:attachment":[{"href":"https:\/\/milesearnandburn.com\/index.php\/wp-json\/wp\/v2\/media?parent=7812"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/milesearnandburn.com\/index.php\/wp-json\/wp\/v2\/categories?post=7812"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/milesearnandburn.com\/index.php\/wp-json\/wp\/v2\/tags?post=7812"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}