‘Diamond hands’ is a term forged in the gauntlet of Reddit’s r/WallStreetBets community. Traders using the social media platform came up with the unique phrase — one of many — and it simply caught on, especially during the meme stock craze that haunted the market in January 2021.
What exactly does diamond hands mean for stocks?
Commonly depicted in its emoji form (see above), ‘diamond hands’ refers to someone who has a high-risk tolerance for high volatility stocks or assets that they own.
They don’t cave under pressure and sell their stocks, essentially.
Is there more to diamond hands?
Well, other than the literal explanation of why it’s called diamond hands — because they continue holding until the stock becomes valuable, like a diamond — there’s not much else to say.
The diamond represents the unyielding strength of the investor holding their volatile asset. Although, a negative definition might refer to the hard-headed stubbornness of the same investor for not letting go of an asset despite its falling value.
There is a safer way to invest though…
The unfortunate, and often unseen, side of this kind of retail investing based on Reddit trends, meme stocks, short-squeezes, and all-around ‘hype’, is that most of the time, the trader loses all of their money.