Form FWP MORGAN STANLEY Submitted by: MORGAN STANLEY
times during the term of the Buffered PLUS may be greater than the closing value of the index on the valuation date, payment at maturity will be based solely on the closing value of the index on the valuation date .
■Investing in the Buffered PLUS is not equivalent to investing in the underlying index. Investing in the Buffered PLUS is not the same as investing in the Underlying Index or its constituent stocks. As an investor in the Buffered PLUS, you will not have any voting rights or the right to receive dividends or other distributions or any other rights in respect of the stocks which make up the underlying index.
■The rate we are prepared to pay for securities of this type, maturity and issue size is likely to be lower than the rate implied by our secondary market credit spreads and advantageous to us. The lower rate and inclusion of the costs associated with the issuance, sale, structuring and hedging of Buffered PLUS in the initial issue price reduce the economics of Buffered PLUS, resulting in the estimated value of the Buffered PLUS is less than the original issue. prices 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 Buffered 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 Buffered 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 Buffered PLUS less. favorable to you than they would otherwise be.
However, since the costs associated with issuing, selling, structuring and hedging the Buffered PLUS are not fully deducted upon issuance, for a period of up to 6 months following the issuance. date of issue, to the extent that MS & Co. can buy or sell the Buffered 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 Buffered PLUS is determined by reference to our pricing and valuation models, which may differ from those of other brokers and is not 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 value of Buffered PLUS than those generated by others, including other brokers. in the market, if they tried to evaluate the Buffered PLUS. 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 Buffered PLUS in the secondary market (if applicable) at all times. The value of your Buffered 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 Buffered PLUS will be influenced by many unforeseeable factors” above.
■The Buffered PLUS will not be listed on any stock exchange and secondary trading may be limited. The Buffered PLUS will not be listed on any stock exchange. Therefore, there may be little or no secondary market for the Buffered PLUS. MS & Co. may, but is not obligated to, make a deal in Buffered PLUS and, if it chooses to make a deal once, may cease to do 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 Buffered 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 hedging positions, the time remaining to maturity and the likelihood that he will be able to resell the Buffered PLUS. Even though there is a secondary market, it may not provide enough liquidity for you to trade or sell Buffered PLUS easily. Since other brokers may not participate significantly in the secondary market for Buffered PLUS, the price at which you can trade your Buffered 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 in Buffered PLUS, it is likely that there would be no secondary market for Buffered PLUS. Therefore, you should be prepared to hold your Buffered PLUS until maturity.
■The Calculation Agent, which is a subsidiary of Morgan Stanley and an affiliate of MSFL, will make decisions regarding the Buffered PLUS. As the Calculation Agent, MS & Co. will determine the Initial Index Value and the Final Index Value, and will calculate the amount of cash you will receive at maturity. 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. For more information on these types of determinations, see “Description of PLUS — Deferral of Valuation Date (s)” and “Calculation and Calculation Agent” and