GARCH Volatility Bands
Model how volatility clusters and decays.
GARCH bands wrap price in a volatility envelope built from a model that captures a key market truth: volatility clusters — calm follows calm, and turbulence follows turbulence.
How to read it
- Widening bands — volatility is rising; expect larger swings and size down.
- Narrowing bands — volatility is contracting; often a coil that precedes an expansion.
- Price pushing the band edge signals a statistically stretched move.
Why GARCH: unlike a fixed-width band, GARCH adapts — it remembers recent shocks and lets volatility decay back toward normal, so the envelope reflects the market’s actual current state.