An investor left holding a stock or investment that has fallen sharply in value. Bag holders usually bought near the peak and watched the price collapse, often because they believed in a trend like FOMO instead of doing research. They may be stuck with losses if they sell, or they may hold hoping to recover their money.
You buy a speculative stock at $45 because it's gaining attention online. The price peaks at $60 and then collapses to $12 as the hype fades. You're now a bag holder with a large loss, unsure whether to sell and accept the loss or hold hoping it recovers.
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