Company: SVIX
Filing Date: 2025-03-28
Form Type: 10-K
Source: 0001013762-25-004207
Chunk: 1569

Company: VS Trust
Filing Date: 2025-03-28
Form: 10-K
Item: Item 11
Chunk 1569
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 price
within a specified period of time, regardless of the market price of that instrument. There are two types of options: calls and puts.
A call option conveys to the option buyer the right to purchase a particular futures contract at a stated price at any time during the
life of the option. A put option conveys to the option buyer the right to sell a particular futures contract at a stated price at any
time during the life of the option. Options written by a Fund may be wholly or partially covered (meaning that the Fund holds an offsetting
position) or uncovered. In the case of the purchase of an option, the risk of loss of an investor’s entire investment (i.e., the
premium paid plus transaction charges) reflects the nature of an option as a wasting asset that may become worthless when the option
expires. Where an option is written or granted (i.e., sold) uncovered, the seller may be liable to pay substantial additional margin,
and the risk of loss is unlimited, as the seller will be obligated to deliver, or take delivery of, an asset at a predetermined price
which may, upon exercise of the option, be significantly different from the market value.

When a Fund writes a call or put, an amount equal
to the premium received is recorded and subsequently marked to market to reflect the current value of the option written. Premiums received
from writing options which expire are treated as realized gains. Premiums received from writing options which are exercised or closed
are added to the proceeds or offset against amounts paid on the underlying futures, swap or security transaction to determine the realized
gain (loss).

When a Fund purchases an option, the Fund pays
a premium which is included as an asset on the Statement of Financial Condition and subsequently marked to market to reflect the current
value of the option. Premiums paid for purchasing options which expire are treated as realized losses. The risk associated with purchasing
put and call options is limited to the premium paid. Premiums paid for purchasing options which are exercised or closed are added to
the amounts paid or offset against the proceeds on the underlying investment transaction to determine the realized gain (loss) when the
underlying transaction is executed.

F-27

Certain options transactions may subject the
writer (seller) to unlimited risk of loss in the event of an increase in the price of the contract to be purchased or delivered. The
value of a Fund’s options transactions, if any, will be affected by, among other things, changes in the value