Company: SVIX
Filing Date: 2025-03-28
Form Type: 10-K
Source: 0001013762-25-004207
Chunk: 194

Company: VS Trust
Filing Date: 2025-03-28
Form: 10-K
Item: Item 1A
Chunk 194
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-going analysis of tax law, regulation, and interpretations thereof.

NOTE 3 – INVESTMENTS

Short-Term Investments

The Funds may purchase U.S. Treasury Bills, agency
securities, and other high-credit quality short-term fixed income or similar securities with original maturities of one year or less.
A portion of these investments may be posted as collateral in connection with swap agreements, futures, and/or forward contracts.

Accounting for Derivative Instruments

In seeking to achieve each Fund’s investment
objective, the Sponsor uses a mathematical approach to investing. Using this approach, the Sponsor determines the type, quantity and
mix of investment positions, including derivative positions, which the Sponsor believes in combination, should produce returns consistent
with a Fund’s objective.

All open derivative positions at period end are
reflected on each respective Fund’s Schedule of Investments. Certain Funds utilized a varying level of derivative instruments in
conjunction with investment securities in seeking to meet their investment objectives during the period. While the volume of open positions
may vary on a daily basis as each Fund transacts derivatives contracts in order to achieve the appropriate exposure to meet its investment
objective, the volume of these open positions relative to the net assets of each respective Fund at the date of this report is generally
representative of open positions throughout the reporting period.

Following is a description of the derivative
instruments used by the Funds during the reporting period, including the primary underlying risk exposures related to each instrument
type.

Futures Contracts

The Funds may enter into futures contracts to
gain exposure to changes in the value of, or as a substitute for investing directly in (or shorting), an underlying benchmark. A futures
contract obligates the seller to deliver (and the purchaser to accept) the future delivery of a specified quantity and type of asset
at a specified time and place. The contractual obligations of a buyer or seller may generally be satisfied by taking or making physical
delivery of the underlying commodity, if applicable, 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, or by cash settlement at expiration of contract.

Upon entering into a futures contract, each Fund
is required to deposit and maintain as collateral at least such initial margin as required by the exchange on which the transaction is
affected. The initial margin is segregated as cash and/or securities balances with brokers for futures contracts, as disclosed in the
Statements of Financial Condition, and is restricted as to its use. The