There are plenty of terms that you will come across during your investment journey. One of the most pronounced terms is ‘paper hands‘ and ‘diamond hands† These so-called Reddit terms can be confusing for crypto and stock investors, thankfully Alphastocks a simple explanation of what these terms mean.
What does ‘paper hands’ mean?
To understand what paper hands is, you must first understand what a meme stock is. A meme stock represents the stock in a company that has experienced a massive surge in volatility due to viral activity in social platforms like Reddit. There is no literal meaning for meme stock, but in general they are stocks with little fundamental value and (high) short positions.
Paper hands is a new term that comes from the Reddit community r/WallStreetBets† Private investors using the platform came up with this term last year and it has really caught on among the investors. “Paper hands” was often used during the meme stock craze that started in January 2021. Simply put, “paper hands” is used by investors on Reddit to describe someone because he/she sells a stock (in their view) too early. Many (private) investors do not know much about investing and decide to sell the share fairly quickly after they have bought a ‘meme share’. When you do this, you have (according to the Reddit community) paper hands. Basically they sell in panic or ignorance. They use the word “paper hands” to describe investors, because at the slightest pressure and smallest drop, they decide to sell.
What does ‘diamond hands’ mean?
Paper hands is the opposite of “diamond hands”, which refers to someone who has a high risk tolerance for high volatility stocks or crypto that they own. Traders with ‘diamond hands’ or ‘diamond hands’ do not give in and do not sell their shares until they have reached their target. It is difficult to define this goal, as the goal of diamond hands is never to sell. In general, the term “diamond hands” is only used for riskier stocks or cryptos, such as: Dogecoin, Virgin Galactic, Gamestop or AMC. No one will say you have diamond hands if you don’t sell Coca-Cola, when it drops -1%. All in all, they are terms with little fundamental meaning. It is mainly a funny and bullying word used for and against private investors. Take these terms with a grain of salt, but at least you now know what they mean!
Most talked about meme stocks
You now have a better idea of paper and diamond hands, but Alphastocks has put together a quick rundown of the top 8 most talked about (meme) stocks on Reddit community r/WallStreetBets.
- GameStop (GME)
- Tesla (TSLA)
- AMC (AMC)
- Tilray Brands (TLRY)
- Apple (AAPL)
- Advanced Micro Devices (AMD)
- Nvidia (NVDA)
- blackberry (BB)
If you have found the perfect stock, then you need a reliable and cheap broker! Most shares can be bought at low cost from DEGIRO or BuxZero.
This article was written by AlphaStocks† Are you curious about how you can better track your investments (crypto, shares and precious metals)? Then take a look at AlphaStocks. Besides the fact that you can track your investments for free, you can also read extensive stock analyzes and various blogs!