Each morning, before the market opens, I fire up my trading platform to see what's happening. Invariably, I'll see some positions with gigantic "losses", because the bid/ask data is just plain silly (e.g. for a $15 stock, it might show a $10 bid and a $20 ask, until such time as the market is actually open). So most of these are false scares.
One of them this morning – APL – was not. This was a short of mine, and it was getting bought for a 35% premium. Not a great way to start the day!
However, this position represented 0.34% of my portfolio, so it was hardly devastating news. Was it good news? Of course not. Would it wreck my portfolio? No. I spread my positions thin. Of course, if the stock dropped 35%, it would also mean that my short wouldn't make a meaningful positive difference either, but everything is a two-edged sword, isn't it?