2022-08-06 13:16:39
Educational Post:
Diamond Hands
Diamond hands is an expression that originated in online investor communities on platforms like Reddit and Twitter. It refers to holding a financial asset and not selling it, regardless of its volatility. Typically, the assets held with diamond hands are highly volatile, such as crypto, options, futures positions, and meme stocks. The term is a reference to diamonds being one the hardest and most resistant natural materials.
If the price of the asset increases, someone with diamond hands doesn’t sell it just to make quick gains. They expect it to rise even further in the future. If the price dramatically drops, the investor has trust in the asset bouncing back at some point and doesn’t want to lock in losses hastily.
An investor could say they have diamond hands when their asset’s price has fallen 50% and they still haven’t sold. There is, in a way, an element of irony in that having diamond hands is almost always high-risk. It’s certainly not a recommended way to manage your portfolio, and people often use the meme to light-hearten heavy losses. Besides saying they have diamond hands, investors also post various images illustrating the reference.
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