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.
BREAKING DOWN '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.

Volume
The number of shares or contracts traded in a security or an ... 
Technical Analysis
A method of evaluating securities by analyzing statistics generated ... 
Momentum
The rate of acceleration of a security's price or volume. The ... 
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 ... 
PutCall Parity
A principle that defines the relationship between the price of ...

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. 
Chart Advisor
4 European Stocks to Consider Buying
European companies, listed on US exchanges, that are providing buying opportunities right now. 
Investing Basics
What Does Plain Vanilla Mean?
Plain vanilla is a term used in investing to describe the most basic types of financial instruments. 
Chart Advisor
ChartAdvisor for October 2 2015
Weekly technical summary of the major U.S. indexes. 
Investing
How Diversifying Can Help You Manage Market Mayhem
The recent market volatility, while not unexpected, has certainly been hard for any investor to digest. 
Options & Futures
Pick 401(k) Assets Like A Pro
Professionals choose the options available to you in your plan, making your decisions easier. 
Technical Indicators
Why MACD Divergence Is an Unreliable Signal
MACD divergence is a popular method for predicting reversals, but unfortunately it isn't very accurate. Learn the weaknesses of indicator divergence. 
Fundamental Analysis
Use Options Data To Predict Stock Market Direction
Options market trading data can provide important insights about the direction of stocks and the overall market. Here’s how to track it.

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 >> 
Can mutual funds invest in options and futures?
Mutual funds invest in not only stocks and fixedincome securities but also options and futures. There exists a separate ... Read Full Answer >> 
What are some of the most common technical indicators that back up Doji patterns?
The doji candlestick is important enough that Steve Nison devotes an entire chapter to it in his definitive work on candlestick ... Read Full Answer >> 
Tame Panic Selling with the Exhausted Selling Model
The exhausted selling model is a pricing strategy used to identify and trade based off of the price floor of a security. ... Read Full Answer >> 
Point and Figure Charting Using Count Analysis
Count analysis is a means of interpreting point and figure charts to measure vertical price movements. Technical analysts ... Read Full Answer >> 
What assumptions are made when conducting a ttest?
The common assumptions made when doing a ttest include those regarding the scale of measurement, random sampling, normality ... Read Full Answer >>