Hello,
Bouncing on Joseph's answer I have a few interrogations:
When you say the price might move between the moment we buy on one exchange and sell on the other you mean between the time we click on the button ?
I am not sure I get it right. If I buy a btc at 4000usd, even if the transaction takes a few hours to get verified and the btc to appear in my wallet, I will still have paid 4kusd for a bitcoin right ?
And if I short (of the exchange allows it) a btc on the other exchange for 4200usd, all i need is to transfer the btc from one wallet to the other and that should do it right ?
(All fees set aside)
Where do I get it wrong ?
When buying BTC with fiat, you get the amount in BTC right away. The only thing that takes time is sending BTC from one exchange wallet to another (for example from poloniex to bittrex, which are 2 well known bitcoin exchange websites).
The problem is that even though for example you send BTC valued at $4000 from exchange site #1 hoping to sell it at exchange site #2 at 4200, by the time it reaches exchange site #2, the value at exchange site #2 may already have corrected its price down to $4000 as well. When this happens, you only loose money on the transaction fee spent for sending between the exchanges.
It is also very unlikely that you will find a $200 difference between exchange, especially for bitcoin. You may be better of trading altcoins. But even that is more volatile.