Glossary

Every term used across these docs, in one place.

Assignment

When a writer's locked collateral is used to pay a buyer who exercised, split proportionally across all writers in that series.

Buy-to-close

A writer repurchasing their own written options on the open market to release their remaining collateral before expiry.

Call

An option that pays the buyer the gain in an asset's price above a chosen strike.

Collateral

The tokens or cash a writer locks before an option can exist; what ultimately backs every payout.

Conservation invariant

The rule that a series token's total supply always exactly equals what's been sold minus what's been redeemed, exercised, or bought back — the protocol's core internal consistency check.

Exercise

Collecting an option's current value immediately, at any time before expiry, at the live oracle price.

Expiry

The date and time a series resolves automatically if nobody has exercised or sold their position.

Intrinsic value

How much an option is worth right now if exercised immediately; the gain already locked in, ignoring any value from time still remaining.

Oracle

The independent price feed Plume reads from for every settlement and exercise; not operated by Plume.

PLM

Plume's token (name: Plume, ticker: PLM). Fixed supply of 10,000,000, no further minting; 75% circulating, 25% allocated to reserves. Its mechanism is buyback-and-burn from protocol fees; no staking, no voting, no governance.

Premium

The price a buyer pays a writer for an option.

Protocol fee

The two fees Plume takes: a small percentage of premium at purchase, and a small percentage of a payout at exercise or settlement. Losing positions are never charged.

Put

An option that pays the buyer the drop in an asset's price below a chosen strike.

Quote engine

The off-chain software that suggests fair premiums; a convenience for the interface, not a part of the contracts.

Redeem

Claiming a settled position's payout after expiry.

Series

One specific combination of asset, strike, expiry, and call-or-put; each series has its own token.

Settlement

The process of finalizing a series' outcome at expiry, using a specific historical oracle price.

Strike

The reference price a call or put is written against; the line an option's payoff is measured from.

Time value

The portion of an option's worth that comes from time still remaining before expiry, separate from its intrinsic value; what's lost by exercising instead of selling.

Underlying

The tokenized stock an option is written on.

Writer

Someone who locks collateral and lists an option for sale.