Why so much difference in prices between exchanges?

[TheNerd]

Ok MtGox seems to always have the highest price and often the smaller exchanges have like 20-30$  cheaper bitcoins.
Why so big difference?
Doesn't that open too much possibility for arbitrage?

[deeper-blue]

The price depends on the trades executed on the exchanges. So yes you could do arbitrage - if you can move your money/btc between exchanges fast enough

[Sage]

The price depends on the trades executed on the exchanges. So yes you could do arbitrage - if you can move your money/btc between exchanges fast enough

Only if you can get a decent fill.  The lag times at Mtgox make that a hell of a gamble right now.

[Thrasher66099]

The price depends on the trades executed on the exchanges. So yes you could do arbitrage - if you can move your money/btc between exchanges fast enough

Only if you can get a decent fill.  The lag times at Mtgox make that a hell of a gamble right now.

This. The risk vs return on arbitrage right now isn't very good. That's specifically because of order execution time. If everything were as liquid as forex those of us who have traded prior would be making a couple million a day pushing coins across multiple exchanges but its just too slow right now.

[avulhop]

The price also reflects on some issues, like how trustworthy the site is (the market is pricing the risk into the exchange) or how difficult it is to get money into the exchange (BTC-e being an obvious example. You can buy BTC cheaper there, but good fucking luck getting your USD into the place).

[avulhop]

This. The risk vs return on arbitrage right now isn't very good. That's specifically because of order execution time. If everything were as liquid as forex those of us who have traded prior would be making a couple million a day pushing coins across multiple exchanges but its just too slow right now.

To be fair, the risk/reward of simply trading BTC is a big gamble hour-to-hour anyway. If you are approaching this like entertainment/gambling, then it's cool, but I can't stress this enough...

DO NOT TRY TO RETIRE BY INVESTING IN BTC