Glossary

Bollinger Bands

By Rohan Fernandes, Founder · Updated 2026-08-22 · Educational reference, not investment advice

Bollinger Bands bracket a moving average (classically 20 periods) with bands two standard deviations wide, computed from the same window. Price at a band marks a statistically stretched move; band width itself measures volatility, and unusually narrow bands mark the compression that precedes expansion.

The width reading is often more useful than the touch reading: band width in the bottom quartile of its own history is a measurable definition of volatility contraction, one of the core criteria in breakout base screening. Touches, like RSI extremes, mark strength as often as reversal in trending tape, which is why they vote inside a composite rather than trigger anything alone.

Educational reference. Options Scanner is a software tool. It is not a broker-dealer, an investment adviser, or a fiduciary, and nothing on this page is investment advice or a recommendation to buy or sell any security. Options involve risk and are not suitable for every investor; read the Characteristics and Risks of Standardized Options before trading. Examples use hypothetical numbers for illustration only.