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Shorting is a difficult game.
Shorting $XRP has been no different, and will be no different.
A mini thread for those thinking about it.
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Shorting $XRP has been no different, and will be no different.
A mini thread for those thinking about it.
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As much as mathematical finance likes to model longs and shorts symmetrically, they aren't symmetric.
Longs are naturally compounding. Shorts aren't, unless you keep topping up.
Longs can't get liquidated (unlevered). Shorts can.
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Longs are naturally compounding. Shorts aren't, unless you keep topping up.
Longs can't get liquidated (unlevered). Shorts can.
..
Shorts have borrow costs. Sometimes with yearly interests over 100%.
That's related to defi "pool 2" yield farming btw.
That's related to defi "pool 2" yield farming btw.
On the way down to zero, price fluctuations will actually look different.
Why? Because the asset becomes more and more like an out-of-money call option. You're shorting a call option, picking up the pennies.
The fabric of price-time is warped. Like approaching a black hole.
Why? Because the asset becomes more and more like an out-of-money call option. You're shorting a call option, picking up the pennies.
The fabric of price-time is warped. Like approaching a black hole.
This one goes without saying -- ask yourself where's your alpha?
If everybody is piling on to this trade, how are you different? More resilient to drawdowns? Earlier than others? Better entry price?
If everybody is piling on to this trade, how are you different? More resilient to drawdowns? Earlier than others? Better entry price?
I'm not saying it can't be done. Just difficult. I personally never have been consistently successful at long term (> a week) shorts.
Having a catalyst is useful to limit your shorting time to a small window.
Having a catalyst is useful to limit your shorting time to a small window.
Good luck, Merry Christmas, and don't let your shorts rip.
