Company: SVIX
Filing Date: 2025-03-28
Form Type: 10-K
Source: 0001013762-25-004207
Chunk: 1642

Company: VS Trust
Filing Date: 2025-03-28
Form: 10-K
Item: Item 12
Chunk 1642
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 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 will be required to make daily cash payments of variation margin. The risk the Fund will be unable to close
out a futures position will be minimized by entering into such transactions on a national exchange with an active and liquid secondary
market.

Option Contracts

An option is a contract that gives the buyer
the right, but not the obligation, to buy or sell a specified quantity of a commodity or other instrument at a specific (or strike) 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