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

Volume
The number of shares or contracts traded in a security or an ... 
Momentum
The rate of acceleration of a security's price or volume. The ... 
Technical Analysis
A method of evaluating securities by analyzing statistics generated ... 
Simple Moving Average  SMA
A simple, or arithmetic, moving average that is calculated by ... 
Underlying
1. In derivatives, the security that must be delivered when a ... 
Exchange Traded Derivative
A financial instrument whose value is based on the value of another ...
RELATED FAQS

What technical tools can I use to measure momentum?
One of the main goals of every trader using technical analysis is to measure the strength of an asset's momentum and the ... Read Full Answer >> 
If a long call is owned on the record date of a stock, is the owner of the option ...
The owner of a long call for a stock is entitled to a dividend only if the option is exercised prior to the exdividend date, ... Read Full Answer >> 
What are the advantages and disadvantages of using systematic sampling?
As a statistical sampling method, systematic sampling is simpler and more straightforward than random sampling. It can also ... Read Full Answer >> 
How effective is creating trade entries after spotting a TriStar pattern?
The tristar patterns, both bullish and bearish, are about as rare as they are unreliable. Comprised of three consecutive ... Read Full Answer >> 
How can an investor profit from the cyclical nature of the electronics sector?
An investor can profit from the cyclical nature of the electronics sector in two ways. He can employ sector rotation, shifting ... Read Full Answer >> 
What does negative vega mean for credit spreads?
Greek vega measures an option's sensitivity with respect to a change in the underlying asset's volatility. The vega of an ... Read Full Answer >>
Related Articles

Active Trading
Measure Momentum Change With ROC
Learn how to build a price rate of change indicator and incorporate it in your strategy. 
Technical Indicators
Simple Moving Averages And Volume RateofChange
We teach you how to confirm buy and sell signals by comparing two very simple indicators. 
Options & Futures
Divergences, Momentum And Rate Of Change
Divergences may signal a change in market direction, but traders must also identify the speed of that change. 
Fundamental Analysis
What is Quantitative Analysis?
Quantitative analysis refers to the use of mathematical computations to analyze markets and investments. 
Chart Advisor
Invest in Japan with this ETF
The Japanese stock market has been front and center in the minds of many international traders over the past few weeks — and for good reason. 
Charts & Patterns
How to Analyze Pharma Stock Fundamentals
What you need to know about analyzing the fundamentals of pharma stocks. 
Chart Advisor
Bullish Traders Are Turning To Rare Earth Metals
Companies that explore and or process rare metals are of specific interest to traders because of strong moves in a couple of the sector’s key players. 
Chart Advisor
Long and Short Trades to Consider This Week
Here are short and long trades to consider, so you have choices no matter which way the market goes. 
Options & Futures
How To Trade Orange Juice Options
How do orange juice options work and which factors determine the orange juice valuations? Here's a sneak peak into the world of orange juice options. 
Trading Strategies
How To Best Analyze Relative Strength
Relative strength indicators measure performance between similar instruments, uncovering opportunities that can translate into reliable profits.