PLEASE don't take it out of water, EVER!!!!!!!!
They lack gills completely, and diffuse everything (including gas exchange) across their skin. In that picture its absorbing everything on your hand into its body: salt, soap, yesterday's pizza, etc...
They are extremly sensitive to water quality. The adults are toxic to fish as they eat corals and anemones and store the toxins from those in their tissues.
Do you have a reef tank? They have VERY high light requirements like a reef does, but they are rough on corals.
Good luck keeping him alive, they generally do pretty poorly in captivity.