Shorting a coin that's announced for delisting might seem like an easy win, but it's not always beneficial or safe. Here's why:
Pros (Why people try to short)
Panic Selling: Prices often drop sharply after a delisting announcement due to panic.
Reduced Liquidity: With fewer buyers, prices can crash — seeming ideal for shorts.
Market Sentiment: Negative news fuels bearish sentiment.
Cons (Serious Risks)
Extreme Volatility: Price may spike unexpectedly due to speculation or whales pumping before delisting.
Liquidity Issues: You might not be able to close your position easily before the coin disappears from the platform.
Delisting Timing: If you're still holding your short when the coin is removed, you may get liquidated or stuck.
Platform Rules: Some exchanges disable shorting or forcibly close positions before delisting.
Short Squeezes: In low-volume trading, shorts can get squeezed by sudden buy orders.
Smarter Approach?
If you short, do it early, manage your risk, and keep your stop-losses tight.
Monitor the exchange’s policy — every platform handles delisting differently.
Consider instead trading the announcement volatility, not holding a position through the whole process.
Would you like a real-life example or case study to see how this has played out before?