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Comment by moondowner | Hacker News Reader

You can keep track of all markets (or the most popular, maybe there are more) on this page: http://bitcoinity.org/markets

Here you have: mtgox, btce, bitstamp, bitcoin24, bitfloor.

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So, this is probably an ignorant question, but:

Is it possible to buy bitcoins on, say Bitstamp @ $85 and then turn around and immediately sell them on Bitfloor @$94? Surely not? What keeps one from doing that? Or does that generally happen until the markets even out?

Note: I don't own any bitcoins (I am averse to risk), just curious and interested and know nothing about ForEx

It is non-trivial to get dollars into accounts on exchanges. It is also not an instant transfer of bitcoins from one exchange to another. your two step process really is a four step one:

     0. Get dollars to Bitstamp to buy bitcoins
     1. Buy bitcouns from Bitstamp
     2. Transfer bitcoins from bitstamp to bitfloor
     3. sell bitcoins on bitfloor (assuming the price hasn't changed).

What you are describing is "location arbitrage" (exploiting differing prices for the same goods in different locations). and it is one of the ways that prices get moved back into line.

With a bit of investment you could have some funds in all the exchanges and thus you could buy low on one exchange and sell high on another within milliseconds. Then you just balance the funds in the background to prevent running out of some type of resource on an exchange, but it doesn't have to be instant because you already have all types of funds on all the exchanges anyway.

Well, in order for this to work you'd have to have a BTC position in the exchange that's quoting higher in the first place. You would have to have entered that position at a price that is lower than your planned exit price in order for this to be profitable. You're still just as susceptible to volatility.

You can do it, but most exchanges require 6 confirms which can take around an hour. You'll be betting that the price difference will be just as good in an hour.

It is worth mentioning that since Mt. Gox has the highest confidence in the exchanges market, it consistently trades 10 - 20% higher than other exchanges almost all the time (unless major market movements propagate downwards from Gox, in which case it would be trading lower before everyone else, but that reaction time is measured in minutes or seconds for cost correction across exchanges) so if you want, you can buy more "risky" bitcoins from less popular exchanges, move them into Gox, and sell them in Gox, doing so successfully means you took the "risk" on a less popular exchange and get the difference in moving the money into a more confident market.

Just as an example, bitstamp is trading at $75 while Mt. Gox is at $120 right now. So if I were to buy bitstamp coins, assuming no major market movements rapidly drove Gox down (which would also drive bitstamp down too) you could move BTC from stamp to Gox and pocket a profit of around $45 per coin by taking the risks involved.

Mt. Gox is not at $120- trading has been suspended per TFA. That price was what it was at when trading was suspended, and because of the suspension it has caused the price to crash at other exchanges.

> Mt. Gox is at $120 right now

Actually, Mt. Gox has no active market now so the last quoted prices there are irrelevant.

Its important to note that right now the Mt. Gox prices (the default graph) are not representative, because trading there is suspended. This is the link to the bitcoin-24.com market: http://bitcoinity.org/markets/bitcoin24/USD

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