# Charm Options

[Charm Options](https://options.charm.fi/) is a breakthrough [automated market-maker](https://academy.binance.com/en/articles/what-is-an-automated-market-maker-amm) (AMM) that can create liquid options on the blockchain.

It works by splitting an asset into different options and creating a prediction market for them, so that they can be priced and traded. This results in options markets that are **cheaper, more liquid, and more scalable.**

Charm Options is unique because:

* Options are priced purely by supply and demand and don't rely on Black-Scholes or an approximation formula. This means price discovery can occur naturally and **options are cheaper**.
* All option markets for a given underlying and expiry are [combined into a single pool](https://medium.com/charmfinance/charm-options-v0-2-f47c8b386bb0), which means trading activity in one market will benefit all the other markets. This means Charm's option markets can **support bigger trades and are therefore more liquid.**
* A [single pool of options](https://medium.com/charmfinance/charm-options-v0-2-f47c8b386bb0) also means that liquidity is not fragmented across multiple markets. This means **more options markets can be provided for any given amount of liquidity.**

In summary, Charm has invented a new type of [capital efficient ](https://app.gitbook.com/@charmfinance/s/charm-finance/~/drafts/-MW4JzBt_k4J-w9jRETd/charm-options/key-features/why-is-capital-efficiency-important/@merged)AMM that can provide a number of unique benefits. 

These benefits are described in the next page.