Introduction
To understand meme stocks, you need to know where the story began, and the story truly starts with WallStreetBets.
WallStreetBets is an internet community where retail investors gather to discuss the stock market and other investment topics. Founded on Reddit in 2012, it has gained prominence in early 2021 despite being around for about a decade. WallStreetBets became the face of the GameStop (GME) and AMC Entertainment (AMC) wave, and today, it boasts over 12 million members.
You will notice one thing about WallStreetBets and other similar retail investment communities: they seem to have their own language. Just as complex financial terms have made the stock market seem inaccessible to many people, the language used in WallStreetBets can make retail investing seem inaccessible to newcomers and visitors as well. In this article, we will break down some of the meme stock trading language you will find in WallStreetBets and similar retail investor communities.
Note: Given that meme stocks experience increased trading volume due to attention on social media rather than company performance, in most cases, the risks of investing in this area are extremely high. Meme stocks are subject to high volatility and rapid growth followed by sharp declines in price and value. They rely heavily on investor sentiment, causing them to be overpriced compared to company fundamentals, often leading to losses.
Stonks
“Stonks” is a meme spelling of the word “stocks”, often used in online memes or in investment forums like WallStreetBets. The term “stonks” dates back to 2017 when it was used in a meme about the stock market that circulated online. The term is commonly used to humorously describe exceptional stock market behavior, such as significant gains or losses.
Ape Together Strong
The phrase “Ape Together Strong” originally comes from the movie “Rise of the Planet of the Apes”, but it has become popular stock trading language. Just as it was used in the film to signify solidarity among the apes, members of WallStreetBets use this term to represent their solidarity with each other.
Note: For instance, in January 2021, some investors used the phrase “Ape Together Strong” in Reddit posts when sharing their recent investments during the rise of GameStop’s stock.
Diamond Hands and Paper Hands
Members of WallStreetBets use the term “diamond hands” to indicate that they plan to hold onto their stocks for the long term. These individuals have a high risk tolerance and can withstand market fluctuations. Many Reddit users and retail investors also use the term “diamond hands” in reference to stocks with extreme volatility or those that have declined in value.
On the other hand, the term “paper hands” describes someone who sells a stock at the first sign of trouble instead of holding it long-term. “Paper hands” is typically an insult used by Reddit users to describe investors who do not stand in solidarity with them by holding onto a stock. For example, investors who sold GameStop shares in 2021 instead of holding them long term might be described as having paper hands.
We Love The Stock
The phrase “We Love The Stock” can be attributed to Jim Cramer, a media personality on CNBC who talks about investing. Cramer originally said this phrase in a sarcastic manner to mock GameStop investors, and it has since become a popular meme on the forum.
Hold the Line
Similar to diamond hands, an investor may say “hold the line” when they plan to keep a stock for the long term and encourage other investors to do the same. Investors may particularly be ready to use this phrase when a certain stock is in a downturn and they encourage others not to exit their positions.
Holder
The Bag Holder
The bag holder is an investor who holds onto their shares, even when the stock price drops significantly or becomes worthless. This term describes someone who has held onto a stock for too long, probably when they should have sold it. Although the term “bag holder” can be used as an insult – and this sometimes happens in the WallStreetBets forum – many people also refer to themselves as bag holders in reference to those meme stocks they bought and have no plans to sell.
Note: When planning to sell a stock, it’s important to look into the future and consider the big picture. It’s often time to think about selling a stock you own when it comes into the media spotlight, and it may be time to think about taking profits. Waiting too long can force you to sell at a loss, which is risky.
Tendies
In the WallStreetBets forum, “tendies” is another term for realized profits from investments. Investors in WallStreetBets often use this term when discussing big wins in the stock market.
YOLO
You might already be familiar with the acronym YOLO, which stands for “You Only Live Once.” In the world of WallStreetBets, investors might describe a YOLO trade, where they invest a large amount of money into a high-risk deal. According to one user in the WallStreetBets forum, “A YOLO should be at least four figures and represent 98% to 100% of your account.”
DD
“DD” stands for Due Diligence, meaning that you have done the necessary research on a specific stock or the market in general before investing. Reddit users might use “DD” in the title of a post if they are sharing research they have conducted or if they are sharing a recent investment made as a result of prior due diligence.
Note: Regardless of the type of investments you are making, it is advisable to conduct due diligence before entering the market. If you look at potential triggers, risks, and all aspects of the company, you are less likely to be surprised by any single event affecting the company.
JPOW
“JPOW” is a colloquial nickname for Jerome Powell, the Chair of the Federal Reserve. Investors in WallStreetBets commonly refer to Powell as JPOW when discussing current Federal Reserve events or what is happening in the economy.
GUH
“GUH” is an internet slang term used to indicate that someone is upset or angry. In the context of WallStreetBets, “GUH” is likely to be used when someone loses a significant amount of money on an investment. For example, someone might use “GUH” in a Reddit post title showcasing a stock chart that is sharply declining.
BANG
“BANG” is an acronym used to describe four popular stocks in the WallStreetBets community: BlackBerry (BB), AMC Entertainment (AMC), Nokia (NOK), and GameStop (GME). These four stocks are a significant part of what helped the Reddit forum gain popularity in early 2021. These are the stocks Reddit users talk about in the forum when discussing “diamond hands” and “holding the line.”
To the Moon
The phrase “to the moon” is used in WallStreetBets to describe the performance of a particular stock. When a stock is “to the moon,” it means it is increasing in stock price. In the Reddit forum, the phrase “to the moon” is often used alongside a rocket emoji.
Note: Meme stocks and the WallStreetBets forum have often been encouraged by mainstream media and famous individuals. On June 24, 2021, Jim Cramer used the phrase “to the moon” in a tweet referring to meme stocks.
ATH
“ATH” stands for “All-Time High,” and Reddit users in WallStreetBets may use “ATH” to describe a particular stock that has reached its all-time high.
Questions
Frequently Asked Questions (FAQs)
What is WallStreetBets?
WallStreetBets is an internet community hosted on the popular website Reddit. Founded in 2012, it is a place for retail investors to share wins and losses in investing, seek advice, and discuss current market events.
What are meme stocks?
Meme stocks are stocks that have gone viral on forums like WallStreetBets and on social media. These stocks may see their prices rise, not due to the underlying performance of the
Source: https://www.thebalancemoney.com/your-guide-to-meme-stock-trading-slang-5216722
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