'Paper hands' is a new term born from the Reddit's r/WallStreetBets community. Retail investors using the platform came up with the trading phrase this year and it has really caught on. 'Paper hands' became used frequently during the meme stock craze that surfaced in January 2021.
What exactly does paper hands mean for stocks?
Simply put, paper hands is used by Reddit investors to describe someone who sells a stock too early. On Reddit, traders who are deemed to have "paper hands" exit a stock position too early, usually because they feel that the risk of losing money is too high. Basically, they panic sell. They use the word paper to describe the investors hands because they fold with the slightest pressure.
Is there more to paper hands?
The term is commonly depicted in its emoji form of toilet paper (below). 'Paper hands' refers to someone who has a low-risk tolerance for high volatility stocks that they have purchased. It has negative connotations associated with it and is often used to tease fellow traders.
Paper hands is the opposite of 'Diamond hands' which refers to someone who has a high-risk tolerance for high volatility stocks or assets that they own. Traders with 'Diamond hands' don't cave and sell their stocks until they have reached their full potential, like diamonds.
What Does 'Diamond Hands' Mean?
Read all about 'Tendies' here, another popular Reddit term.
Looking for a safer way to invest?
Unfortunately, buying stocks based on Reddit trends, meme stocks, short-squeezes, and social media 'hype', is that oftentimes, the trader loses a lot of their money.
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