BOUHMIDI BANDS / EXPLAINED
What are Bouhmidi Bands?
Your strategy. Another dimension.
Bouhmidi Bands translate the volatility priced into options into a concrete price range. They give you a reference for reading the next trading day: how far has the market moved compared with its implied expectation?
Two closing prices. A range for the day.
The market’s close
The previous closing price is the centre of the range. For the S&P 500, this is the cash index’s close.
The volatility close
The matching volatility index measures expected fluctuations priced into options. The S&P 500 uses VIX; DAX uses VDAX-NEW.
Three band levels
The result is an upper and lower boundary at 1σ, 1.5σ and 2σ. A higher volatility reading creates wider bands; a lower reading creates narrower ones. The levels stay fixed for the displayed session.
One range. Different scenarios.
Inside the range
The move remains within the selected band. Its position helps you judge how much of that range has already been covered.
At a band
Price reaches a reference level. Read its timing, structure and volume to assess whether the move is stalling or gaining strength.
Beyond a band
The move has exceeded that band’s range. Both continuation and a return inside are possible; the touch alone does not decide your trade.
Schematic price paths around the 1σ bands. No current prices.
What the studies observed.
How often did the final closing price fall between the upper and lower band?
S&P 500
- ±1σ
- 80.8%
- ±1.5σ
- 93.9%
- ±2σ
- 98.1%
S&P 500 · 4,646 sessions · 4 Feb 2008–23 Jul 2026
Historical frequencies in the study sample, not strategy win rates. A close inside the bands does not mean the entire session stayed inside.
Source: Salah-Eddine Bouhmidi’s original studies, section 4.
Four instruments. One cockpit.
First, understand price and time. Volume adds the activity behind the move. Bouhmidi Bands add implied volatility: how much movement is priced in. Like instruments in a cockpit, each becomes more useful when read with the others. Understanding the current situation means bringing the whole panel into view.
For futures traders.
Use the bands as another reference for trend, breakout and reversal setups. For ES, distinguish the futures contract from the S&P 500 cash index and use the corresponding price levels. The S&P 500 study’s figures describe the cash index.
For options traders.
Compare the underlying’s price with the implied range when considering strikes and scenarios. Expiry, option pricing and your risk rules still matter.
Your edge starts with context.
Bouhmidi Bands add implied volatility to the strategy you already use. Read them with price, time and volume to understand the current situation. A band touch alone is not a trading signal.
See current bands