Bollinger Bands & the squeeze

Bollinger Bands are volatility envelopes plotted two standard deviations around a 20-day average; when they narrow sharply — a "squeeze" — volatility is unusually low.

Bollinger Bands wrap a stock’s price in an upper and lower band set two standard deviations above and below its 20-day moving average. The bands widen when the price is volatile and narrow when it is calm, so the distance between them is a direct read on recent volatility.

A "squeeze" is when the bands pinch to their tightest in a long while — a sign the stock has gone quiet. Traders watch squeezes because low-volatility periods sometimes precede larger moves, though the bands say nothing about which direction such a move would take.

stocks-llm measures the squeeze by ranking each stock’s current band width against its own recent history (a self-percentile), recomputed nightly. It describes volatility, not direction — it is not a signal to buy or sell.

Stocks in a Bollinger squeeze →

See more terms in the stocks-llm glossary.

Informational only — NOT financial advice. This is an educational definition, not a recommendation to buy or sell anything. Metrics on stocks-llm are delayed data and may be missing or stale. Always verify information independently and consult a qualified financial professional before making any investment decision.