Company: SRV
Filing Date: 2025-10-22
Form Type: N-2/A
Source: 0001398344-25-019582
Chunk: 63

Company: NXG Cushing Midstream Energy Fund
Filing Date: 2025-10-22
Form: N-2/A
Chunk 63
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 options are available for a greater variety of
securities or baskets of securities, and in a wider range of expiration dates and exercise prices than exchange-traded options. However,
unlike exchange-traded options, which are issued and guaranteed by a regulated intermediary, such as the OCC, OTC options are entered
into directly with the counterparty. Unless the counterparties provide for it, there is no central clearing or guaranty function for
an OTC option. Therefore, OTC options are subject to the risk of default or non-performance by the counterparty. Accordingly, the Investment
Adviser must assess the creditworthiness of the counterparty to determine the likelihood that the terms of the option will be satisfied.
There can be no assurance that a continuous liquid secondary market will exist for any particular OTC option at any specific time. As
a result, the Fund may be unable to enter into closing sale transactions with respect to OTC options.

Index Options. Call and put options
on indices operate similarly to options on securities. Rather than the right to buy or sell a single security at a specified price, options
on an index give the holder the right to receive, upon exercise of the option, an amount of cash determined by reference to the value
of the underlying index. The underlying index may be a broad-based index or a narrower market index. Unlike options on securities, all
settlements are in cash. The settlement amount, which the writer of an index option must pay to the holder of the option upon exercise,
is generally equal to the difference between the fixed exercise price of the option and the value of the underlying index, multiplied
by a specified multiplier. The multiplier determines the size of the investment position the option represents. Gain or loss to the Fund
on index options transactions will depend on price movements in the underlying securities market generally or in a particular segment
of the market rather than price movements of individual securities. As with other options, the Fund may close out its position in index
options through closing purchase transactions and closing sale transactions provided that a liquid secondary market exists for such options.

Index options written by the Fund may be covered
in a manner similar to the covering of other types of options, by holding an offsetting financial position. The Fund may cover call options
written on an index by owning securities whose price changes, in the opinion of the Investment Adviser, are expected to correlate to
those of the underlying index.

Foreign Currency Options. Options on
foreign currencies operate similarly to options