What does momentum measure in a financial context?

Momentum in a financial context specifically measures the rate of change in price over time. It reflects how quickly the price of a security or asset is moving in a particular direction, indicating the strength of price movement. When prices increase rapidly, this indicates strong bullish momentum, while a rapid decrease suggests strong bearish momentum.

Understanding momentum is crucial for traders and analysts as it provides insights into potential future price movements. A rising momentum can signal continuation of trends, while falling momentum may indicate a potential reversal or loss of trend strength. This makes momentum a vital concept in technical analysis, where traders look for patterns and signals based on past price actions to inform their investment decisions.

The other options relate to different aspects of market behavior, such as transaction speed, trade volume, and price volatility, which do not directly address the concept of momentum in the same way.