How much delta changes from the passing of time alone. It grows before major expiration dates, forcing the market maker to adjust the hedge just because a day went by.
What it measures
Charm (Charm) is a second-order Greek that measures the erosion of delta from the passing of time alone: an out-of-the-money contract's delta slides toward zero day after day (its odds are dying), and an in-the-money contract's delta creeps toward one (its fate is settling). No price move is needed.
Why it moves the market
Because hedgers' deltas change while they sleep: a market maker who hedged protective puts sold to institutions finds the short hedge oversized each morning that passes quietly. Put deltas lose their negative size as time passes, so the dealer buys back what was sold as a hedge. A small, silent, daily buy flow, as long as the protection stays in place and the market stays calm.
Its seasonal timing
It grows as expiration nears (delta decay speeds up like time decay), so the weeks before major expirations carry the clearest charm tailwinds. After expiration the page turns: the whole structure dies at once and the map is rebuilt.
Hypothetical example
A market creeps up a few tenths a day in a news-free week before a huge quarterly expiration: no eager buyer, just mechanical daily rebuying by hedgers whose protective deltas are melting. The creep usually ends with the expiration itself.
Common mistake
Asking too much of it: charm is a breeze, not a storm. Any real flow (news, data) wipes it out within minutes. Read it as the backdrop of quiet days, not a dominant force.
Where to see it on the platform
The gamma dashboard lists it with vanna among the creeping structural forces, along with the expiration calendar that marks when it peaks.
