Company: SVIX
Filing Date: 2025-03-28
Form Type: 10-K
Source: 0001013762-25-004207
Chunk: 646

Company: VS Trust
Filing Date: 2025-03-28
Form: 10-K
Item: Item 4
Chunk 646
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,
forward contracts and foreign currency forward contracts, as applicable, may be subject to periods of illiquidity because of market conditions,
regulatory considerations and other reasons. For example, swaps and forward contracts are not traded on an exchange, do not have uniform
terms and conditions, and in general are not transferable without the consent of the counterparty. In the case of futures contracts,
commodity exchanges may limit fluctuations in certain futures contract prices during a single day by regulations referred to as “daily
limits.” During a single day, no futures trades may be executed at prices beyond the daily limit. Once the price of a futures contract
has increased or decreased by an amount equal to the daily limit, positions in such futures contracts can neither be taken nor liquidated
unless the traders are willing to effect trades at or within the limit. Futures contract prices have occasionally moved to the daily
limit for several consecutive days with little or no trading. Such market conditions could prevent a Fund from promptly liquidating its
futures positions.

20

In addition, the Sponsor will seek to minimize
the market impact of rebalances across all exchange traded products based on VIX futures contracts (“VIX ETPs”) that it sponsors
on the price of VIX futures contracts by limiting the Funds’ participation, on any given day, in VIX futures contracts to no more
than 10% of the VIX futures contracts traded on Cboe Futures Exchange, Inc. (“CFE”) during any “Rebalance Period,”
defined as any fifteen minute period of continuous market trading. To limit participation during periods of market illiquidity, the Sponsor,
on any given day, may vary the manner and period over which all VIX ETPs it sponsors are rebalanced, and as such, the manner and period
over which the Funds are rebalanced. The Sponsor believes that a Fund will enter an extended rebalance period most often during periods
of extraordinary market conditions or illiquidity in VIX futures contracts. In the event that the Fund participates in an extended rebalance
period, the Fund represents that it will notify the Exchange and the SEC of such participation as soon as practicable, but no later than
9:00 a.m. ET on the trading day following the event.

Entry into swap agreements or forward contracts
may further impact liquidity because these contractual agreements are executed “off-exchange” between private parties and,
therefore, the time required to offset or “unwind” these positions may be greater