Guide
The Volatility Dashboard ranks your watchlist stocks by volatility metrics, primarily ATR% (Average True Range as a percentage of price) and Bollinger Band width. Higher volatility = more risk and opportunity. Lower volatility often precedes breakouts.
Average True Range (ATR) measures the average price movement per day over the last 14 trading days. It is expressed in dollars.
ATR accounts for gaps and daily high-low range, providing a more complete picture of volatility than just close-to-close price changes.
| Example | What it means |
|---|---|
| $150 stock with $4.50 ATR | Average daily price movement is $4.50 (from intraday high to low, including gaps). |
| $30 stock with $1.20 ATR | Average daily movement is $1.20. |
Note: ATR absolute values cannot be compared across stocks with different prices. A $10 stock with $0.50 ATR is more volatile than a $100 stock with $2 ATR. Use ATR% instead for cross-stock comparison.
ATR % = (ATR-14 ÷ Current Price) × 100
This normalizes volatility as a percentage of stock price, allowing direct comparison between stocks at different price levels.
| ATR % | Interpretation |
|---|---|
| 6.0%+ | Very high volatility. Large daily swings are common. Higher risk and opportunity for traders. |
| 3.0% - 5.9% | High volatility. Above-average price movement. Suitable for swing trading. |
| 1.5% - 2.9% | Medium volatility. Moderate price swings. Typical for many stocks. |
| 0.5% - 1.4% | Low volatility. Small daily ranges. Often blue-chip or stable stocks. |
| < 0.5% | Very low volatility. Tight trading range. May be coiling for a move or just stable/boring. |
Stocks are ranked by ATR% from highest to lowest, making it easy to find the most/least volatile stocks in your watchlist.
The dashboard assigns each stock to a category based on its ATR%. Categories provide quick visual identification:
BB Width % = (Upper Band - Lower Band) ÷ Lower Band × 100
Bollinger Band width measures the distance between upper and lower bands (±2 standard deviations from 20-period SMA) as a percentage.
| BB Width | What it signals |
|---|---|
| < 5% (Squeeze) | Very tight bands, low volatility. Often precedes significant breakout or breakdown. The 'calm before the storm.' |
| 5% - 15% | Normal band width. Moderate volatility. |
| > 15% | Wide bands, high volatility. Large price swings. Bands may contract after expansion (volatility cycles). |
Bollinger Band Squeeze: When BB Width drops below 5%, the dashboard highlights it. Squeezes often resolve with directional moves, making them valuable setups for breakout traders.
High volatility stocks (options trading)
Top-ranked stocks with ATR% > 4% are good candidates for options strategies that benefit from high implied volatility and large price swings (straddles, strangles, iron condors).
Low volatility stocks (conservative positions)
Bottom-ranked stocks with ATR% < 1% are more stable, suitable for conservative investors or covered call strategies (lower premiums but less risk).
Bollinger Band squeeze breakouts
Filter for stocks with BB Width < 5%. These are coiling in tight ranges and often break out decisively. Combine with volume and momentum filters for best setups.
Position sizing
Use ATR% to inform position sizing. Higher volatility stocks require smaller position sizes to maintain consistent dollar risk. ATR also helps set stop-loss distances (e.g., 2× ATR stop).
Access the Volatility Dashboard from the Analysis page under the Volatility tab.