What is a bagholder?

Someone stuck holding a position long after the smart money left.

You bought YES at 70%, the news turned, it's trading at 15%, and you're still holding, congratulations, you're holding the bag. The term is crypto-native but the experience is universal.

In prediction markets bags at least expire: every market resolves, so the bag either pays out at 1 or goes to zero on a known date. The lesson bagholding teaches, update when the evidence updates, don't marry a position, is core forecasting skill.