What does ‘diamond hands’ mean?

Diamond Hands Definition - The slang expression ‘diamond hands’ refers to keeping a risky investment even when there is a lot of pressure to sell. It's particularly popular with high-risk investments like Bitcoin and meme stocks.

Despite the satirical nature of the joke, diamond hands may be useful in certain circumstances.

Diamond hands — depicted by these emojis 💎🙌 — is a phrase that indicates a high level of risk-taking. Investors often make use of it on Reddit, Twitter, and other social media platforms. Having diamond hands suggests you are an investor who will not panic and sell off your investments when the price of a stock rises or falls significantly.

What is actually means to have diamond hands can vary depending on the context. When the price of your investment goes up, some people believe you should hold on to your investment even if you can sell it for a profit — but most people merely think of it as a way to remain tough through downturns. Under this definition, if you decide to sell your diamonds after a large investment, you will be able to keep your ‘diamond hands' status.

It's important to remember that diamond hands are reserved for describing risky investments. When the value of Bitcoin falls, you may boast of having diamond hands. While sharing a photo of your Gamestop losses on Twitter, you may use the gem and raised hands emojis. You definitely cannot use this term to refer to yourself when Coca-Cola stock drops 0.5 percent.

Do diamond hands work?

When it comes to investing in high-risk assets, the diamond hands strategy might be a wise choice. In this case, you may have to weather some difficult times before your investments begin to pay off.

Many feel that Bitcoin, for example, is an excellent investment despite the dangers — but only if you're ready to keep it for the long term. High-risk investments should never account for more than a small percentage of your portfolio, though. It’s wiser to invest in more stable and proven assets.

What is the origin of diamond hands?

The phrase ‘diamond hands’ is believed to have originated on Reddit in the WallStreetBets subreddit, where it has been used since at least 2018. In 2019, it began to gain popularity and many people started using the phrase in connection to holding stocks for a long time. While ‘diamond hands’ originated sometime in 2018, it started to catch on in 2021 during the Gamestop shopping frenzy.

But why diamonds? One theory is that diamonds are formed under high pressure, thus your assets will appreciate in value if you can withstand the strain. Another reason is that diamonds are recognized for their hardness, therefore diamond hands will always retain an investment. Or, it might have no significant origin at all.

Diamond hands vs paper hands

Someone who trades with the ‘paper hand’ is a person who doesn't have the patience to maintain their holdings. Volatility in the market rattles them easily, and they typically sell their holdings when there is even the slightest indication of risk. For these people, the primary goal is to keep losses to a minimum; if you've got paper hands, you'll be compelled to sell to prevent a loss of money.

Conversely, diamond hand traders have a lot of patience. High-end endurance is required to use this method. There’s a lack of patience among paper hand traders, who are more prone to participate in intraday trading for short-term profits.