Exchange price differences: selling in one and buying the other?

[RaptorRed]

Mt. Gox seems to be $100 higher than other exchanges. Is it common for people buy BTC at the cheaper exchange, move to the more expensive change, and then sell? What prevents this, if it was common wouldn't the exchanges be much closer in price? Does a large sell wall liek this indicate anything (either positive or negative)?

[masyveonk]

Mt. Gox seems to be $100 higher than other exchanges. Is it common for people buy BTC at the cheaper exchange, move to the more expensive change, and then sell? What prevents this, if it was common wouldn't the exchanges be much closer in price? Does a large sell wall liek this indicate anything (either positive or negative)?

Time.

Withdrawing USD from Mt. Gox might take months. From other exchanges days

[mjc]

The process of trading between them is call arbitrage.  You can then even trade between currencies.  I know there are people doing it.  In less volatile times this is what keeps the exchanges closer together.  I tried to work out a way to do it and found that the exchanges stayed in check based on the cost to move funds in ant out and the transaction fees.  I also noticed that it appeared to manage electronically.  So once you get into electronic trading with tiny margins speed (or the reduction of it) between you and the exchange begins to matter.


What I did notice that if you look at the Chinese price and multiply it by the exchange rate to the US Dollar of 0.16 the price is WAY out of sync.  At time almost twice as much.   I think a wise Forex trader could make a killing off that market.