A person who fails to sell a stock before it crashes
A lot of the people who bought into GameStop stock recently are going to end up bagholders.
|ROI||Return on investment|
|EPS||Earnings per share|
|Diamond hands||To hold a stock through losses|
|Paper hands||To sell a stock at the first sign of trouble|
|Retail investor||Individual, non-professional investor|
When you're discussing stocks and cryptocurrency, a bagholder is an investor who fails to sell before the item's price crashes. This term is a mash-up of the word stockholder and the phrase "holding the bag," which means to take the blame for something.
An investor can become a bagholder in any number of ways. For example, a corporate scandal could cause a once-reputable stock's price to nosedive, or a cryptocurrency might release a glut of new coins, causing existing coins' worth to fall. Sometimes, however, bagholders are victims of their own greed or financial ignorance. Stubborn and/or inexperienced investors may hold a volatile stock well past the optimal time to sell, in hopes of realizing even greater gains. If those investors don't sell before the stock bottoms out, they may end up becoming bagholders.