Company: DEFI
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001999371-25-006264
Chunk: 10

Company: Tidal Commodities Trust I
Filing Date: 2025-05-15
Form: 10-Q
Item: Item 8
Chunk 10
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 particular
futures contract is set from time to time by the exchange on which the contract is traded and may be modified from time to time
by the exchange during the term of the contract. Brokerage firms, such as the Fund’s clearing brokers, carrying accounts
for traders in commodity interest contracts generally require higher amounts of margin as a matter of policy to further protect
themselves. Over the counter trading generally involves the extension of credit between counterparties, so the counterparties
may agree to require the posting of collateral by one or both parties to address credit exposure.

When
a trader purchases an option, there is no margin requirement; however, the option premium must be paid in full. When a trader
sells an option, on the other hand, he or she is required to deposit margin in an amount determined by the margin requirements
established for the underlying interest and, in addition, an amount substantially equal to the current premium for the option.
The margin requirements imposed on the selling of options, although adjusted to reflect the probability that out-of-the-money
options will not be exercised, can in fact be higher than those imposed in dealing in the futures markets directly. Complicated
margin requirements apply to spreads and conversions, which are complex trading strategies in which a trader acquires a mixture
of options positions and positions in the underlying interest.

Ongoing
or “maintenance” margin requirements are computed each day by a trader’s clearing broker. When the market value
of a particular open futures contract changes to a point where the margin on deposit does not satisfy maintenance margin requirements,
a margin call is made by the broker. If the margin call is not met within a reasonable time, the broker may close out the trader’s
position. With respect to the Fund’s trading, the Fund (and not its shareholders personally) is subject to margin calls.
Finally, many major U.S. exchanges have passed certain cross margining arrangements involving procedures pursuant to which the
futures and options positions held in an account would, in the case of some accounts, be aggregated and margin requirements would
be assessed on a portfolio basis, measuring the total risk of the combined positions.

Expenses

Expenses
are recorded using the accrual method of accounting.

Net
Income (Loss) per Share

Net
income (loss) per share is the difference between the NAV per unit at the beginning of each period and at the end of each period.
The weighted average number of units outstanding was computed for purposes of disclosing net income (loss)