Fund Objective & Key Features

The United States Short Oil Fund, LP ("DNO") is a domestic exchange traded security designed to inversely track in percentage terms the movements of light, sweet crude oil prices.

DNO is a commodity pool organized as a Delaware limited partnership that issues units that may be purchased and sold on the NYSE Arca.

DNO's Objective

The investment objective of DNO is to have the changes, in percentage terms, of the units' net asset value inversely reflect the changes, in percentage terms, of the spot price of light, sweet crude oil delivered to Cushing, Oklahoma, as measured by the changes in the price of the futures contract on light, sweet crude oil as traded on the New York Mercantile Exchange that is the near month contract to expire, except when the near month contract is within two weeks of expiration, in which case the futures contract will be the next month contract to expire, less DNO's expenses. It is not the intent of DNO to be operated in a fashion such that its NAV will equal, in dollar terms, the spot price of crude oil or any particular futures contract based on crude oil.

DNO's Target

Crude oil is one of the most important physical commodities in the global economy. Light, sweet crude oil futures are one of the most actively traded futures contracts and represent the primary US benchmark for oil prices.

DNO's Portfolio

The portfolio takes short positions in crude oil interests to the fullest extent possible without being leveraged or unable to satisfy its current or potential margin or collateral obligations with respect to short positions in futures contracts and other crude oil-related investments. Short positions in futures contracts and the management of its investments in short-term obligations of the United States of two years or less ("Treasuries'), cash and cash equivalents will be used for margining purposes and as collateral.

DNO's Risk

Commodities and futures generally are volatile and are not suitable for all investors. DNO is speculative and involves a high degree of risk. An investor may lose all or substantially all of an investment in DNO. Funds that focus on a single sector generally experience greater volatility.

DNO is not a mutual fund or any other type of Investment Company within the meaning of the Investment Company Act of 1940, as amended, and is not subject to regulation there under.

For further discussion of these and additional risks associated with an investment in DNO units, Click Here.

DNO carries additional risk, including inverse correlation, market price variance and short sale risks. The price of DNO's units may be influenced by factors such as the short-term supply and demand for crude oil and the short-term supply and demand for DNO's units. This may cause the units to trade at a price that is above or below DNO's NAV per unit. Accordingly, changes in the price of units may substantially vary from the inverse of changes in the price of crude oil. If this variation occurs, then you may not able to effectively use DNO as a way to hedge against crude oil-related losses or as a way to indirectly invest in crude oil.

Investing in oil interests subjects DNO to the risks of the oil industry. These risks could result in large fluctuations in the price of DNO's units. An investor could lose all or substantially all of his/her investment. The United States Short Oil Fund is distributed by ALPS Distributors, Inc.

DNO's Key Features

United States Short Oil Fund, LP is an exchange traded security listed on NYSE Arca under the symbol DNO. The symbol for DNO's Indicative Intraday Fund ("IIF") Value is DNO.IV. The symbol for DNO's net asset value ("NAV") is DNO. The symbol for DNO's shares outstanding is DNO.SO.
DNO's units will trade throughout the market day.
Units will be created and redeemed by "authorized purchasers" ("AP's").
An AP purchases or redeems creation baskets or redemption baskets, respectively, from or to DNO.
DNO does NOT seek to use leverage and targets a 1:1 relationship between assets and oil exposure.
The management fee is equal to 0.60% of it's average net assets.
# United States Commodity Funds LLC, DNO's General Partner, seeks to minimize tracking error, NOT outperform the market.
Transparent portfolio market price, NAV, and portfolio holdings.
Annual tax reporting done by PricewaterhouseCoopers.

UDNO's Creation & Redemption Process

Creation/Redemption Basket Size 100,000 Units
Order cut-off for APs is 12:00 pm EST
# DNO's NAV calculated as of 4:00 pm EST
Settlement is T+3
Transaction charge for Each AP Order is $1,000 (per order, not per basket)
Creation Payment is in Cash and/or Acceptable Treasuries
Custodian is Brown Brothers Harriman
Marketing Agent is ALPS Distributors, Inc.

U.S. Federal Income Tax Considerations

A summary of the material U.S. federal income tax consequences of the purchase, ownership and disposition of units in DNO and the U.S. federal income tax treatment of DNO, is set forth in the Prospectus .

Each prospective investor is advised to consult its own tax advisor as to the U.S. federal income tax consequences of an investment in DNO to the investor and as to applicable state, local or foreign taxes.

Tax Status of DNO

DNO is organized and will be operated as a limited partnership in accordance with the provisions of the Amended and Restated Agreement of Limited Partnership, dated January 6, 2009, and applicable state law. Under the Internal Revenue Code of 1986, as amended (the "Code"), an entity classified as a partnership that is deemed to be a "publicly traded partnership" is generally taxable as a corporation for federal income tax purposes. The Code provides an exception to this general rule for a publicly traded partnership whose gross income for each taxable year of its existence consists of at least 90% "qualifying income" ("qualifying income exception"). For this purpose, section 7704 defines "qualifying income" as including, in pertinent part, interest (other than from a financial business), dividends and gains from the sale or disposition of capital assets held for the production of interest or dividends. In addition, in the case of a partnership a principal activity of which is the buying and selling of commodities (other than as inventory) or of futures, forwards and options with respect to commodities, "qualifying income" includes income and gains from such commodities and futures, forwards and options with respect to commodities. DNO and the General Partner have represented the following to Sutherland Asbill & Brennan LLP:

at least 90% of DNO's gross income for each taxable year will constitute "qualifying income" within the meaning of Code section 7704 (as described above);
DNO will be organized and operated in accordance with its governing agreements and applicable law; and
DNO has not elected, and will not elect, to be classified as a corporation for U.S. federal income tax purposes.

Based in part on these representations, Sutherland Asbill & Brennan LLP is of the opinion that DNO will be classified as a partnership for federal income tax purposes and that it will not be taxable as a corporation for such purposes.

If DNO failed to satisfy the qualifying income exception in any year, other than a failure that is determined by the Internal Revenue Service to be inadvertent and that is cured within a reasonable time after discovery, DNO would be taxable as a corporation for federal income tax purposes and would pay federal income tax on its income at regular corporate rates. In that event, unitholders would not report their share of DNO's income or loss on their returns. In addition, distributions to unitholders would be treated as dividends to the extent of DNO's current and accumulated earnings and profits. To the extent a distribution exceeded DNO's earnings and profits, the distribution would be treated as a return of capital to the extent of a unitholder's basis in its units, and thereafter as gain from the sale of units. Accordingly, if DNO were to be taxable as a corporation, it would likely have a material adverse effect on the economic return from an investment in DNO and on the value of the units.

Under recently enacted legislation, interests in and income from "qualified publicly traded partnerships" satisfying certain gross income tests are treated as qualifying assets and income, respectively, for purposes of determining eligibility for regulated investment company ("RIC") status. A RIC may invest up to 25% of its assets in interests in a qualified publicly traded partnership. The determination of whether a publicly traded partnership such as DNO is a qualified publicly traded partnership is made on an annual basis. DNO expects to be a qualified publicly traded partnership in each of its taxable years. However, such qualification is not assured.

The foregoing is only a partial summary of the federal income tax consequences of an investment in DNO. The full summary can be found in the Prospectus .

Fund Details
DNO	as of 02/03/2012
Ticker	DNO
CUSIP	91201T102
ISIN	US9126132052
Minimum Trade Size	1 unit
Marginable*	Yes
Options Traded	Yes
Administrator	Brown Brothers Harriman & Co
Distributor	ALPS Distributors, Inc.
General Partner	United States Commodity Funds LLC
Management Expense Ratio	0.60%
Trading Increment	$0.01

*There are special risks associated with margin investing. Please ask your financial advisor for more information about these risks.

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