As I was writing my last blog post about options trading, I realized that there are a lot of investing terms that people might not be familiar with. Plus, the Reddit subgroup WallStreetBets has popularized many newer phrases and terms that might need some explaining. In light of that, this blog is going to be a little different and I’m going to simply give you definitions to some investing terms that you might need some clarification on.
Short Selling: an advanced investment strategy that speculates on the decline in a stock’s price. Short selling is started when the investor opens a position by borrowing shares of a stock that they believe will decrease in value. The investor then sells these borrowed shares to buyers willing to pay the market value of the stocks. The trader is betting that the stock price will continue to decline and they can purchase them at a lower cost when the time comes to pay back the shares. Short selling can generate profits but it can also cause potentially limitless losses if the prices sky rockets (like it did with GameStop and AMC).
Diamond Hands: investors who are ready to hold a position until their end goal is reached, despite potential risks and losses. (I’m currently diamond handing Bitcoin until it rises above $60,000 again.)
Paper Hands: investors that sell early due to negative news or the pressure of the situation.
HODL: “Hold On for Dear Life”, derived from misspelling the work “hold” as in a buy-and-hold strategy.
Bag Holder: someone who purchased when a stock or cryptocurrency’s price was high and holds the stock or crypto that has fallen in value and keeps holding, believing the price will recover.
Tendies: derived from chicken tenders, it means profits or gains.
To the Moon: phrase used to express confidence in the performance of a chosen stock or cryptocurrency.
Bull Market: a financial market that is on the rise and where the conditions of the economy are overall favorable. Bull markets generally see a sustained increase in stock prices.
Bear Market: a financial market that exists in an economy that is receding and where most stocks are declining in value.
Let me know if there are any other terms or phrases you want me to clarify or define. Don’t forget to like this blog post and follow my Twitter where I post investment news and articles every weekday.