DEFIANCE DAILY TARGET 2X SHORT ASTS ETF ASTN Stock Analysis

About DEFIANCE DAILY TARGET 2X SHORT ASTS ETF

The Fund is an actively managed exchangetraded fund that attempts to achieve 2 times the inverse (-200%) of the daily percentage change in the price of the UnderlyingSecurity by employing derivatives, namely swap agreements and/or listed options contracts. The Fund aims to generate 2 times theinverse of the daily performance of the Underlying Security for a single day, and not for any other period. A “single day”is defined as being calculated “from the close of regular trading on one trading day to the close on the next trading day.”The Fund is classified as “non-diversified” under the 1940 Act. If the Fund encounters limitations in implementingits strategies, whether due to market conditions, derivative availability, counterparty issues, or other factors, the Fund maynot achieve investment results, before fees and expenses, that correspond to 2 times the inverse (-2x) the daily performance ofthe Underlying Security, and may return substantially less during such periods. During such periods, the Fund’s actual leveragelevels may differ substantially from its intended target, both intraday and at the close of trading, potentially resulting in significantlylower returns. The Fund may enter into swap agreementsas a substitute for directly shorting the Underlying Security. The Fund will enter into one or more swap agreements with majorfinancial institutions for a specified period ranging from one day to more than one year whereby the Fund and the financial institutionwill agree to exchange the return (or differentials in rates of return) earned or realized on the Underlying Security. The grossreturn (meaning the return before deducting any fees or expenses) to be exchanged or “swapped” between the partiesis calculated with respect to a “notional amount,” (meaning the face amount of the instrument) e.g., the return onor change in value of a particular dollar amount representing the Underlying Security. At the end of each day, the Fund’sswaps are valued using market valuations and the Fund’s investment adviser rebalances the Fund’s holdings in an attemptto maintain short exposure for the Fund equal to -200% of the Underlying Security. The Fund may also utilize listed optionsto seek to achieve leveraged -2X exposure to the Underlying Security. The Fund will primarily employ short-dated (a month or less)in-the-money call options (options with strike prices below the current market price of the Underlying Security, offering immediateintrinsic value). Additionally, the Fund may use other option strategies to produce similar exposure to the Underlying Security,like buying calls and selling puts with identical strike prices. These options allow the Fund to adjust its leverage strategy inresponse to market conditions, liquidity constraints, or other factors that may affect the availability or pricing of swap agreements.The use of listed options provides additional flexibility in pursuing the Fund’s daily investment objective. In situationswhere swap availability is constrained, the Fund may rely more heavily on options contracts. Additionally, the Fund may use optionsin response to changing market dynamics. However, the use of option contracts is typically less efficient than swaps and may increasethe likelihood that the Fund is unable to achieve its daily -2X objective. For examples of a hypothetical investmentin the Fund, see “Additional Information About the Fund – Principal Investment Strategies” below. Fund performance for periods greater thanone single day is primarily (but not solely) a function of the following factors: a) the Underlying Security volatility; b) theUnderlying Security performance; c) period of time; d) financing rates associated with inverse exposure; and e) other Fund expenses. The Fund may invest in (1) U.S. Governmentsecurities, such as bills, notes and bonds issued by the U.S. Treasury; (2) money market funds; (3) short term bond ETFs; and/or(4) corporate debt securities, such as commercial paper and other…