Shorting Gapped-Up stocks before/after the open

Before shorting gapped up stocks at the open, you should already be familiar with day trading short.

Here are considerations when shorting stocks that gap up Pre-Market:

There needs to be signifigant volume Pre-Market or AH the prior day for a gapped up, short trade to potentially work.  In other words, the catalyst has to force a squeeze of existing shorts and/or create buying panic.

Pre-market direction is difficult to judge.  90% of the time I close or reduce my pre-mkt short trade before the open and then re-short after the open(even if I get filled at a worst price).

If you are unfamiliar or uncomfortable with thin, pre-market trading conditions, then don't trade short during pre-market.

Reduce trading size until you are consistent.

Intraday volatility is normally highest at the open.  Spreads become wide.  So, you must allow for wiggle room.  And if you are wrong, i.e. squeezed, expect to lose more money than usual.

Always scale-in.  Increase exposure upon confirmation. On some trades, confirmation usually occurs when the opening range is broken.  Realize there will be many sell orders, likely market orders, following the break of the opening range. On other trades, initial shorts are squeezed to a higher price before the actual stock price decline begins.

Level of shorting difficulty for gapped up stocks, from most difficult to least difficult: momentum based, earnings beat, news and analyst upgrades.

Momentum based shorts which move due to popularity, for ex. Ebola stocks or body camera stocks, are difficult to short if the float has been traded several times over during the previous day.  Other recent stocks which fall into this category include PBMD and VLTC.  Avoid shorting these stocks until you have an advanced ability in market timing.  Better to trade these stocks on the long side.

Stocks which gap up due to strong earnings will potentially be a long trade after a morning decline, particularly if the stock is trading at new highs.