Rate Of Change

AAA

DEFINITION of 'Rate Of Change'

The speed at which a variable changes over a specific period of time. Rate of change is often used when speaking about momentum, and it can generally be expressed as a ratio between a change in one variable relative to a corresponding change in another. Graphically, the rate of change is represented by the slope of a line.

INVESTOPEDIA EXPLAINS 'Rate Of Change'

Rate of change is often illustrated by the Greek letter delta. Many traders pay close attention to the speed at which one variable changes relative to another. For example, option traders study the relationship between the rate of change in the price of an option relative to a small change in the price of the underlying asset, known as an options delta.

RELATED TERMS
  1. Volume

    The number of shares or contracts traded in a security or an ...
  2. Underlying

    1. In derivatives, the security that must be delivered when a ...
  3. Technical Analysis

    A method of evaluating securities by analyzing statistics generated ...
  4. Simple Moving Average - SMA

    A simple, or arithmetic, moving average that is calculated by ...
  5. Momentum

    The rate of acceleration of a security's price or volume. The ...
  6. Multibank Holding Company

    A company that owns or controls two or more banks. Mutlibank ...
Related Articles
  1. Measure Momentum Change With ROC
    Active Trading

    Measure Momentum Change With ROC

  2. Simple Moving Averages And Volume Rate-of-Change
    Technical Indicators

    Simple Moving Averages And Volume Rate-of-Change

  3. Divergences, Momentum And Rate Of Change
    Options & Futures

    Divergences, Momentum And Rate Of Change

  4. What technical tools can I use to measure ...
    Trading Strategies

    What technical tools can I use to measure ...

comments powered by Disqus
Hot Definitions
  1. Due Diligence - DD

    1. An investigation or audit of a potential investment. Due diligence serves to confirm all material facts in regards to ...
  2. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate ...
  3. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  4. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
  5. Ratio Analysis

    Quantitative analysis of information contained in a company’s financial statements. Ratio analysis is based on line items ...
  6. Days Payable Outstanding - DPO

    A company's average payable period. Calculated as: ending accounts payable / (cost of sales/number of days).
Trading Center