Company: SRV
Filing Date: 2025-10-22
Form Type: N-2/A
Source: 0001398344-25-019582
Chunk: 61

Company: NXG Cushing Midstream Energy Fund
Filing Date: 2025-10-22
Form: N-2/A
Chunk 61
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 the writer
of a put option, the Fund receives the premium from the purchaser of the option and has the obligation, upon exercise of the option,
to pay the exercise price and receive delivery of the underlying security. If the option expires without being exercised, the Fund is
not required to receive the underlying security in exchange for the exercise price but retains the option premium.

The Fund may write put options that are “covered.”
A put option on a security is covered if the Fund has purchased a put on the same security as the put written, the exercise price of
which is equal to or greater than the exercise price of the put written.

Selling put options involves the risk that
the Fund may be required to buy the underlying security at a disadvantageous price, above the market price of such security, at the time
the option is exercised. While the Fund’s potential gain in writing a covered put option is limited to the premium received, the
Fund’s risk of loss is equal to the entire value of the underlying security, offset only by the amount of the premium received.

The Fund may also write uncovered put options.
The seller of an uncovered put option theoretically could lose an amount equal to the entire aggregate exercise price of the option if
the underlying security were to become valueless.

The Fund may close out an options position
which it has written through a closing purchase transaction. The Fund would execute a closing purchase transaction with respect to a
call option written by purchasing a call option on the same underlying security and having the same exercise price and expiration date
as the call option written by the Fund. The Fund would execute a closing purchase transaction with respect to a put option written by
purchasing a put option on the same underlying security and having the same exercise price and expiration date as the put option written
by the Fund. A closing purchase transaction may or may not result in a profit to the Fund. The Fund could close out its position as an
option writer only if a liquid secondary market exists for options of that series and there is no assurance that such a market will exist
with respect to any particular option.

The writer of an option generally has no control
over the time when the option is exercised and the option writer is required to deliver or acquire the underlying security. Once an option
writer has received an exercise notice, it cannot effect a closing purchase transaction in order to terminate its obligation under the
option. Thus, the use of options may require the Fund to buy or sell portfolio securities at inopportune