Bollinger Bandwidth is the width of the bands expressed as a percent of the moving average. When the bands narrow drastically, a sharp expansion in volatility can be expected to occur soon afterwards. According to Bollinger, there's one pattern that raises more questions than any other aspect of Bollinger bands. He calls it "the Squeeze". As he puts it, his bands "are driven by volatility, and the Squeeze is a pure reflection of that volatility".
Here we look at the squeeze and how it can help you identify breakouts. Bollinger Bands employ upper and lower standard deviation bands together with a center simple moving average band around price to identify high and low volatility points. While it can be a real challenge to forecast future prices and price cycles, volatility changes and cycles are relatively easy to identify. This is because equities alternate between periods of low volatility, followed by periods of high volatility, and so on - much like the calm before the storm and the inevitable inactivity afterward.

The squeeze equation:

Bollinger Bandwidth = (Top Bollinger Band (20 periods))-Bottom Bollinger Band (20 periods))/ Simple Moving Average Close (20 periods).

A squeeze candidate is identified when the bandwidth is at a six-month low value. When Bollinger Bands are far apart, volatility is high, and when they are close together, it is low. A squeeze is triggered when volatility reaches a six-month low and is identified when Bollinger Bands reach a six-month minimum distance apart.