Form FWP MORGAN STANLEY Submitted by: MORGAN STANLEY
economic conditions of the Trigger PLUS, cause the estimated value of the Trigger PLUS to be lower than the initial issue price and will negatively affect secondary market prices. Assuming that market conditions or any other relevant factor do not change, the prices, if any, at which brokers, including MS & Co., might be willing to purchase the Trigger PLUS in market transactions. secondary will likely be significantly lower than the initial issue price. , because the secondary market prices will exclude the costs of issue, sale, structuring and hedging which are included in the initial issue price and borne by you and because the secondary market prices will reflect our credit spreads on the secondary market and the bid-offer spread that any broker would charge in a secondary market transaction of this type as well as other factors.
The inclusion of the costs of issuing, selling, structuring and hedging the Trigger PLUS in the initial issue price and the lower rate that we are willing to pay as the issuer makes the economic conditions of the Trigger PLUS less. favorable to you than they would otherwise be.
However, since the costs associated with issuing, selling, structuring and hedging the Trigger PLUS are not fully deducted upon issuance, for a period of up to 6 months following the issuance. issue date, to the extent that MS & Co. can buy or sell the Trigger PLUS on the secondary market, in the absence of changes in market conditions, including those related to the underlying index, and to our secondary market credit spreads, it would do so on the basis of values greater than the estimated value, and we would expect these higher values to also be reflected in your brokerage account statements.
■The estimated value of the Trigger PLUS is determined by reference to our pricing and valuation models, which may differ from those of other brokers and does not constitute a maximum or minimum price in the secondary market. These pricing and valuation models are proprietary and are based in part on subjective views of certain market data and certain assumptions about future events, which may prove to be incorrect. Therefore, since there is no standard market method for valuing these types of securities, our models may give a higher estimated Trigger PLUS value than those generated by others, including other brokers. in the market, if they attempted to evaluate the PLUS Trigger. Additionally, the estimated value on the pricing date does not represent a minimum or maximum price at which resellers, including MS & Co., would be willing to purchase your Trigger PLUS in the secondary market (if applicable) at all times. The value of your Trigger PLUS at any time after the date of this document will vary depending on many factors that cannot be accurately predicted, including our creditworthiness and changes in market conditions. See also “The market price of Trigger PLUS will be influenced by many unforeseeable factors” above.
■The Trigger PLUS will not be listed on any stock exchange and secondary trading may be limited. The Trigger PLUS will not be listed on any stock exchange. Therefore, there may be little or no secondary market for the Trigger PLUS. MS & Co. may, but is not obligated to, make a deal in Trigger PLUS and, if it chooses to make a deal once, may stop doing so at any time. When making a market, it will usually do so for routine secondary market size trades at prices based on its estimate of the current value of the Trigger PLUS, taking into account its bid / offer spread, our credit spreads, market volatility, the notional size of the proposed sale, the cost of unwinding the associated hedge positions, the time remaining to maturity and the likelihood that he will be able to resell the Trigger PLUS. Even though there is a secondary market, it may not provide enough liquidity for you to trade or sell the Trigger PLUS easily. Since other brokers may not participate significantly in the secondary market for Trigger PLUS, the price at which you can trade your Trigger PLUS will likely depend on the price, if any, at which MS & Co. is willing to trade. If at any time MS & Co. were to stop establishing a market for the Trigger PLUS, it is likely that there would be no secondary market for the Trigger PLUS. Therefore, you should be prepared to keep your Trigger PLUS until maturity.
■The Calculation Agent, which is a subsidiary of Morgan Stanley and an affiliate of MSFL, will make decisions regarding the Trigger PLUS. As the Calculation Agent, MS & Co. will determine the Initial Index Value, the Trigger Level and the Final Index Value, including whether the Underlying Index has fallen below the level of. trigger, and calculate the amount of cash you will receive at maturity, if any. In addition, certain decisions taken by MS & Co., in its capacity as Calculation Agent, may require it to exercise its discretion and make subjective judgments, for example regarding the occurrence or not of events. disruption and the selection of an index successor or the calculation of the final index value in the event of a market disruption or shutdown of the underlying index. These potentially subjective determinations may adversely affect the payment made to you at maturity, if any. For more information on these types of determinations, see “Description of PLUS — Carrying Forward of Valuation Date (s)” and “Calculation Agent and Calculations” and associated definitions in the accompanying Product Supplement. In addition, MS & Co. has determined the estimated value of the Trigger PLUS on the pricing date.
■The hedging and trading activities of our affiliates could potentially adversely affect the value of the Trigger PLUS. One or more of our affiliates and / or third-party brokers plan to conduct hedging activities related to the Trigger PLUS (and other instruments related to the Underlying Index or its constituent stocks), including trading in stocks that make up the underlying index as well as in other instruments linked to the underlying index. Therefore, these entities may unwind or adjust their hedge positions during the term of the Trigger PLUS, and the hedging strategy may involve larger and more frequent dynamic adjustments to the hedge as the valuation date approaches. Some of our affiliates also regularly trade the stocks that make up the Underlying Index and other financial instruments linked to the Underlying Index as part of their general brokerage and other activities. Any of these hedging or trading activities on or before the pricing date could potentially increase.