Faisal KhanAnswered Jun 1, 2015Assuming we don't consider the fees (as that varies from exchange to exchange), the process is pretty simple. However, exchanges have put in their mitigation gates (read: processes) that thwart such attempts on a larger scale.
For example if you were to buy from Bitstamp at $900 (1BTC) and transfer it to Mt.Gox and sell it there for $1000, congratulations you now made US$ 1000 and a gross profit of $100. But this $1000 would will not be able to use for say 10-15 days (or more) as that is the average time Mt. Gox takes to release your money.
In some instances, the exchanges have a limit on how many Bitcoins you can trade or maximum payout per month.
The only way to do it - is to have multiple accounts and investments for each day (as explained from the diagram below), which assumes it will be 7 days before you get your money.
The larger version of this image can be viewed here: Bitcoin Arbitrage Image.png
For example if you were to buy from Bitstamp at $900 (1BTC) and transfer it to Mt.Gox and sell it there for $1000, congratulations you now made US$ 1000 and a gross profit of $100. But this $1000 would will not be able to use for say 10-15 days (or more) as that is the average time Mt. Gox takes to release your money.
In some instances, the exchanges have a limit on how many Bitcoins you can trade or maximum payout per month.
The only way to do it - is to have multiple accounts and investments for each day (as explained from the diagram below), which assumes it will be 7 days before you get your money.
The larger version of this image can be viewed here: Bitcoin Arbitrage Image.png