Company: SVIX
Filing Date: 2025-11-13
Form Type: 10-Q
Source: 0001213900-25-109885
Chunk: 305

Company: VS Trust
Filing Date: 2025-11-13
Form: 10-Q
Item: Part II, Item 8
Chunk 305
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 such initial margin as required by the exchange on which the transaction is
affected. The initial margin is segregated as cash and/or securities balances with brokers for futures contracts, as disclosed in the
Statements of Financial Condition, and is restricted as to its use. The Funds that enter into futures contracts maintain collateral at
the broker in the form of cash and/or securities. Pursuant to the futures contract, each Fund generally agrees to receive from or pay
to the broker(s) an amount of cash equal to the daily fluctuation in value of the futures contract. Such receipts or payments are known
as variation margin and are recorded by each Fund as unrealized gains or losses. Each Fund will realize a gain or loss upon closing of
a futures transaction.

Futures contracts involve, to varying degrees,
elements of market risk (specifically exchange rate sensitivity, commodity price risk or equity market volatility risk) and exposure to
loss in excess of the amount of variation margin. The face or contract amounts reflect the extent of the total exposure each Fund has
in the particular classes of instruments. Additional risks associated with the use of futures contracts are imperfect correlation between
movements in the price of the futures contracts and the market value of the underlying Index or commodity and the possibility of an illiquid
market for a futures contract. With futures contracts, there is minimal but some counterparty risk to the Funds since futures contracts
are exchange-traded and the credit risk resides with the Funds’ clearing broker or clearinghouse itself. Many futures exchanges
and boards of trade limit the amount of fluctuation permitted in futures contract prices during a single trading day. Once the daily limit
has been reached in a particular contract, no trades may be made that day at a price beyond that limit or trading may be suspended for
specified times during the trading day. Futures contracts prices could move to the limit for several consecutive trading days with little
or no trading, thereby preventing prompt liquidation of futures positions and potentially subjecting a Fund to substantial losses. If
trading is not possible, or if a Fund determines not to close a futures position in anticipation of adverse price movements, the Fund
will be required to make daily cash payments of variation margin. The risk the Fund will be unable to close out a futures position will
be minimized by entering into such transactions on a national exchange with an active and liquid secondary market.

F-19

Option Contracts

An option is a contract that gives the buyer the
right, but not the obligation, to buy or sell a specified