Thaw shrimp in a large bowl filled with cool to lukewarm water. See Note 1.
While shrimp is thawing make the Shrimp marinade. Combine 2 tablespoon olive oil, ¾ teaspoon garlic powder, ¾ teaspoon onion powder, ¾ teaspoon Italian seasoning, ½ teaspoon paprika, and ½ teaspoon of salt in a large bowl and mix well. Set bowl aside.
Once shrimp is thawed, pat dry with a paper towel.
Add the thawed shrimp into the marinade bowl and mix gently to completely cover all the shrimp with the oil and spices and allow to marinate for while you make the cocktail sauce.
For the cocktail sauce combine ½ cup ketchup, 2 tablespoon horseradish, 1 tablespoon lemon juice, ½ teaspoon Worcestershire sauce, and ½ teaspoon hot sauce like Tabasco or sriracha.
Mix thoroughly and taste test to determine if you want to add more hot sauce. Cover with a lid or cling wrap and place in fridge until ready to use.
Preheat air fryer to 400F for 4 minutes.
Place marinated shrimp into air fryer basket leaving sufficient space between shrimp to allow air flow.
Air fry at 400F for 4 minutes flipping the shrimp at the halfway mark. The shrimp are done when they have curled up and are pink and opaque.
Serve on a plate with a squeeze of fresh lemon juice and fresh parsley for garnish. Shrimp cocktail sauce for dipping.