SOCKS transparent proxying was introduced in Charles 3.1. Read more about the reasons for using SOCKS transparent proxying in HTTP vs SOCKS proxy.

Open the Proxy Settings in the Proxy menu. The easiest way to enable the SOCKS configuration is to click the “SOCKS Proxy Mode” button in the Quick Configuration panel. That will enable the SOCKS Proxy and configure your browsers to use SOCKS instead of HTTP.

It can be hard to observe the different behaviour. The easiest way is to visit http://maps.google.com/ and zoom in on the map. Click on the HTML page in the Charles tree (probably <default>) and then switch to the Chart view. Take a look at how many of the requests for images “mt?n=...” occur in parallel in the chart. Compare that between the HTTP and SOCKS modes. You should see approximately 2 concurrent map tile fetches with HTTP compared to 8 with SOCKS.