Stock Meadow · Metric glossary · Price trend
Bollinger Band Width: formula and how to read it
The width of the Bollinger Bands shows how much the price has been swinging relative to its average. John Bollinger noted that periods of very narrow bands, sometimes called a squeeze, are often followed by larger moves, although not in a known direction.
What is Bollinger Band Width?
How wide the Bollinger bands are compared with the price; narrow means quiet. The distance between the upper and lower Bollinger band divided by the 20-day average. A low reading (a squeeze) means the stock has been trading in a tight range; a high one means it has been swinging widely.
Stock Meadow groups it under Price trend, and shows it in tables as BB width.
Formula and a worked example
Band width = (upper band − lower band) ÷ 20-day average; bands = 20-day average ± 2 standard deviations
Bands at $96 and $104 around a $100 average give a width of (104 − 96) ÷ 100 = 8%. The numbers are made up for illustration.
How to read it
A low figure means the stock has been trading in a tight range and a high figure means it has been swinging widely. Compare a stock's width with its own history and its peers. It is a filter only, because neither end is better.
It can be used as a filter and as a column, but not for scoring: it describes a company rather than making it better or worse.
Common pitfalls
- A narrow band does not say which way the next move will go.
- Different stocks have different normal widths, so a figure that is tight for a utility may be wide for a bank.
- Blank until there are 20 trading days of prices.
How Stock Meadow handles gaps. Usually blank when there are fewer than 20 days of prices.
Treat any single metric as one clue, and read the company's financial statements before drawing a conclusion. Stock Meadow's figures are research tools based on reported data, not investment advice.
Stock Meadow models that use it
No scoring model uses it. It is a filter and a table column only.
Read about every scoring model in How scores work.
Frequently asked questions
- What is a Bollinger squeeze?
- It is a period when the bands are unusually close together, meaning volatility has been low. Traders watch for it because quiet periods are often followed by larger moves, but the direction cannot be read from the squeeze itself.
- Can I score stocks on BB width?
- It can be used as a filter and as a column, but not for scoring: it describes a company rather than making it better or worse.
- Why is BB width blank for some stocks?
- It is usually blank when there are fewer than 20 days of prices. Stock Meadow leaves the figure blank rather than guessing it.
Use BB width in Stock Meadow
Filter the whole stock list on Bollinger band width (20 days) and show it as a column in the stock screener. Sign up free, no card needed.
Open the stock screener