Trading in option contract is found to be more complex and challenging as compared with other segment of Indian Equity Market. It may be due to immense fluctuation in the option prices.Volatility in prices is one of the important factors causes this type of changes of option pricing. This volatility shall be traced by using momentum indicators of technical analysis.Bollinger Band is one of the tools of technical analysis which helps in ascertaining momentum and give hint about future volatility in prices.The present study aims to test trading system using Bollinger Band to trade in option contract by addressing to the volatility in prices. For this purpose, historical data of NSE‘s NIFTY index was tested on stipulated rules of Bollinger Band indicating strong momentum and accordingly creating long position in corresponding In TheMoney option contracts. The risk and return of using this trading mechanism in NIFTY option was calculated using Return, Maximum Loss Zone, Average Gain to Average Loss Ratio, Strike Rate (Success rate) and its significance. The results are found acceptable for aggressive traders with time frame of two weeks in option contracts.