Definition of Bag Holder

What does the term "bag holder" mean? What is the definition of the term "bag holder"?

If you are said to be "left holding the bag", then this means that you have gotten stuck with something that is worthless or nearly worthless.

Definition of Bag HolderFor instance, let's say that you buy a house that turns out to need massive structural repairs (new foundation, etc). These repairs are going to cost more than what the house is worth, so you are said to be "holding the bag" in the transaction.

In the world of stocks, the term "bag holder" means the same thing.

Let's say that you buy a stock at $10. The company is found to be fraudulently inflating their numbers shortly thereafter, and the stock plummets as a result, trading down to as low as $0.55.

You are said to be a "bag holder" now, as you are holding an asset that has become almost entirely worthless.

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