Company: SVIX
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001213900-25-044385
Chunk: 84

Company: VS Trust
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 2
Chunk 84
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 underlying asset or by making an offsetting sale or purchase of an identical
futures contract on the same or linked exchange before the designated date of delivery. The difference between the price at which the
futures contract is purchased or sold and the price paid for the offsetting sale or purchase, after allowance for brokerage commissions
and exchange fees, constitutes the profit or loss to the trader.

Futures contracts involve, to varying degrees,
elements of market risk and exposure to loss in excess of the amounts of variation margin, which are the amounts of cash that a Fund agrees
to pay to or receive from FCMs equal to the daily fluctuation in the value of a futures contract. Additional risks associated with the
use of futures contracts are imperfect correlation between movements in the price of the futures contracts and the level of the underlying
benchmark and the possibility of an illiquid market for a futures contract. With futures contracts, there is minimal but some counterparty
risk to a Fund since futures contracts are exchange traded and the exchange’s clearing house, as counterparty to all exchange-traded
futures contracts, effectively guarantees futures contracts against default. Many futures exchanges and boards of trade limit the amount
of fluctuation permitted in futures contract prices during a single trading day. Once the daily limit has been reached in a particular
contract, no trades may be made that day at a price beyond that limit or trading may be suspended for specified times during the trading
day. Futures contracts prices could move to the limit for several consecutive trading days with little or no trading, thereby preventing
prompt liquidation of futures positions and potentially subjecting a Fund to substantial losses. If trading is not possible or if a Fund
determines not to close a futures position in anticipation of adverse price movements, the Fund may be required to make daily cash payments
of variation margin.

Futures Account Agreements

Each Fund has entered into a written agreement
(each, a “Futures Account Agreement”) with one or more FCMs governing the terms of futures transactions of a Fund cleared
by such FCM. Each FCM has its own agreement and other documentation used for establishing customer relationships. As such, the terms of
the Futures Account Agreement and other documentation that a Fund has with a particular FCM may differ in material respects from that
with another FCM.

Most Futures Account Agreements do not require
the FCM to enter into new transactions or maintain existing transactions with a Fund. In general, each FCM is permitted to terminate its
agreement