A slang term for an investor who sells quickly when prices drop or at the first sign of trouble. Someone with paper hands lacks conviction and panic sells during downturns, often locking in losses. The term contrasts with diamond hands by suggesting weak resolve.
You buy a stock at $50, and it drops to $40 in one week. You panic and sell immediately, accepting the loss. A few months later, the stock rises to $80. Your paper hands decision to sell early cost you significant gains.
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