Table of Сontents
- What Does ‘Paper Hands’ Mean?
- ‘Paper Hands’ Origin
- Bottom Line
- FAQs
The slang for investors who sell their investments too soon, sometimes due to a fear of taking risks, is “paper hands.”
Investors with paper hands are rumored to sell in a panic at the first hint of pressure or instability. They are referred to as “paper” because of how easily they are thought to fold.
What Does ‘Paper Hands’ Mean?
A paper-hands investor is someone who sells prematurely out of risk aversion or fear of financial loss. When under the smallest strain, they are believed to fold like paper and sell investments before they have a chance to recover. Paper hand investors’ early withdrawals could prevent them from losing more money on companies that are declining in value even if they might miss future rebounds or turnarounds. This expression is sometimes used as an insult or to mock other traders in internet forums. That implies that they can end up losing money in the long run as a result of their aversion to taking chances.
The phrase is most frequently used in online trading forums. For instance, if a shareholder purchases a stock and its price drops by
Paper Hands vs. Diamond Hands
Investors with paper hands and those with diamond hands are viewed as opposites. Investors who trade with “paper hands” are those who are concerned about portfolio losses and will sell a stock or investment at the first hint of turbulence or a price decrease. Investors using paper hands frequently succeed in reducing their losses, but they run the risk of missing out on stock rises or bounces. The phrase “paper hands” is nearly usually used negatively.
Diamond hands investors, on the other hand, are retail investors who are adamant or determined in their investing decisions. They adhere to the conventional investing wisdom of “buy and hold,” and they refuse to sell even during periods of extreme market turbulence. When referring to someone who can resist market volatility, this phrase can be used either positively or negatively.
‘Paper Hands’ Origin
The term “term paper hands” originated on Reddit in the r/WallStreetBets forum. The phrase “paper hands” is sometimes used by persons who trade in wildly volatile meme stocks or cryptocurrencies, similar to the phrase “diamond hands.” Many slang phrases have gained popularity thanks to the r/WallStreetBets forum, including “FOMO,” which stands for the fear of missing out on stock possibilities.
When the forum pushed several meme stocks like GameStop in 2021, the term paper hands became more well-known. The phrase is also used by bitcoin traders since they operate in an industry that is subject to extreme market volatility.
Investors write “paper hands” using an emoji shorthand. Both the open hands and toilet paper roll emojis are present.
Bottom Line
Investors that are risk-averse who sell out of assets at the first hint of volatility are referred to as “paper hands.” While it’s important to limit losses while investing, doing so too early might result in missing out on large returns.
