Company: DJTWW
Filing Date: 2025-11-07
Form Type: 10-Q
Source: 0001140361-25-040977
Chunk: 182

Company: Trump Media & Technology Group Corp.
Filing Date: 2025-11-07
Form: 10-Q
Item: Part I, Item 8
Chunk 182
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 of a purchased call option and a sold put option which provides us exposure to increases in bitcoin prices while limiting downside
      risk should the price decrease.

    Written covered put and call options on bitcoin related securities generate premium income and allow us to purchase bitcoin related securities at lower effective prices.  The put options are covered by
      cash collateral to cover potential purchases and the call options are covered by our ownership in the underlying security. In exchange for this commitment, we receive premiums immediately paid in cash. The difference between the premium received and
      the amount paid while affecting a closing purchase transaction, including brokerage commissions, is also treated as a realized investment gain or loss.  This premium acts as income, increasing our investment yield.  If the written option expires
      worthless, we keep the full premium as profit with no obligation to purchase. If a put option is exercised, we buy the security at the strike price using the cash collateral, and the premium received reduces the effective cost basis, allowing us to
      acquire the securities at a discount compared to direct market purchases.  If a written call option is exercised, we sell the security at the strike price using our existing holdings of the security, and the premium received reduces any loss or
      increases any gain we may incur.

    The writer of an option bears the market risk of an unfavorable change in the price of the security underlying the written option. The aggregate fair value of unexpired options written is included in accounts payable and accrued expenses in the condensed consolidated balance sheets. Cash held as collateral for written options is classified as restricted cash on the condensed consolidated balance sheet. Securities held as collateral for outstanding written call options are presented within trading securities on the condensed consolidated balance sheet. As of September 30, 2025, we had $309,000.0 of restricted cash covering our unexpired put options. We did not have unexpired covered call options as of September 30, 2025.

    We record these derivative instruments on our condensed consolidated balance sheets at fair value and typically do not offset derivative assets and liabilities. Cash flows from derivative financial
      instruments and the related gains and losses are classified as cash flows from operating activities on the condensed consolidated statements of cash flows.  The changes in the fair values of these option contracts are immediately recognized as
      investment income in our condensed consolidated statements of operations.

    Digital Assets

    Our digital assets consist of our investments in bitcoin and Cronos. We retain ownership of and control over our digital assets and use third-party custodial services