Options Greeks
What is Charm (Delta Decay) and how does it alter your position delta over the weekend?
By Easy Money Scanner · Educational reference · Not investment advice
The short answer
Charm, or delta decay, measures how an option's delta changes purely due to the passage of time, independent of any movement in the underlying stock price.
How it works
Charm effects are strongest for near-the-money options close to expiration, where delta can drift meaningfully toward zero or one over a weekend even without price movement.
An example
An ATM XYZ call with a 0.50 delta on Friday might show a noticeably different delta on Monday morning purely from two days of time passing, absent a price move.
Risk & limitations
Charm is a second-order effect that compounds with gamma and theta, so weekend-held short-dated positions can behave differently than expected when markets reopen.
Examples are hypothetical, not trade recommendations. US contract and regulatory references do not automatically apply in Canada. Rules, margin requirements and broker policies can change; confirm them with the relevant authority and your broker.