FWP Morgan Stanley Finance Form Provided by: Morgan Stanley Finance LLC
Associated with the issuance, sale, structuring and hedging of securities at the original issue price reduces the economic conditions of the securities, causes the estimated value of the securities to be lower than the original issue price, and will adversely affect secondary market prices. Assuming no change in market conditions or other relevant factors, the prices, if any, at which traders, including MS & Co., may be willing to purchase securities in secondary market transactions, will likely be lower. significantly less than the original issue price, because secondary market prices will exclude issuance, selling, structuring and hedging costs that are included in the original issue price and are borne by you, and because secondary market prices will reflect secondary market credit spreads and bid-ask spreads for which the dealer will charge a market transaction fee. Secondary factors of this type, in addition to other factors.
The inclusion of the costs of issuing, selling, structuring and hedging the securities in the original issue price and the lower price we are willing to pay as an issuer makes the economic terms of the securities less favorable to you than they otherwise would be.
However, because the costs associated with issuing, selling, structuring and hedging securities are not fully deductible upon issuance, for up to 6 months after the issuance date, to the extent MS & Co. may Buying or selling securities. In the secondary market, in the absence of changes in market conditions, including those relating to the underlying shares, our secondary market credit spreads will be based on values higher than the estimated value, and we expect those higher values to also be reflected in your brokerage account statements. With you.
￭The estimated value of securities is determined by reference to our pricing and valuation models, which may differ from those of other dealers and does not represent the maximum or minimum secondary market price. These pricing and valuation models are proprietary and are based in part on subjective views of certain market inputs and certain assumptions about future events, which may prove incorrect. As a result, because there is no standard market method for valuing these types of securities, our models may yield a higher estimated value for the securities than those generated by others, including other market participants, if they attempt to value the securities. In addition, the estimated value on the quote date does not represent the minimum or maximum price at which dealers, including MS & Co, would be willing to purchase your securities in the secondary market (if any) at any given time. The value of your securities at any time after the date hereof will vary based on many factors that cannot be accurately predicted, including our creditworthiness and changes in market conditions. See also “The market price of securities may be affected by many unpredictable factors” above.
￭The securities will not be listed on any securities exchange and secondary trading may be limited. The securities will not be listed on any stock exchange. Therefore, there may be little or no secondary market for the securities. MS & Co. may, but is not obligated to, create a market for the securities and, if it elects to create a market at any time, may cease doing so at any time. When it creates a market, it will generally do so for routine secondary market volume transactions at prices based on its estimate of the current value of the securities, taking into account the bid/offer spread, our credit spreads, market volatility, the notional size of the proposed sale, and the cost of unwinding. Any relevant hedging positions, the time remaining until maturity, and the likelihood of being able to resell the securities. Even if there is a secondary market, it may not provide sufficient liquidity to allow you to easily trade or sell securities. Because brokers and other dealers may not be heavily involved in the secondary market for securities, the price at which you may be able to trade your securities will likely depend on the price, if any, at which MS & Co. is willing to deal. . If, at any time, MS & Co. ceases to have a market for the securities, there will likely be no secondary market for the securities. Accordingly, you should be willing to hold your securities until maturity.
￭The Account Agent, an affiliate of Morgan Stanley and an affiliate of MSFL, will make decisions with respect to the securities. As Account Agent, MS & Co. will determine The initial price of the stock, the level of minimum downside, the final price of the stock, the percentage change in the stock or the stock’s performance factor, as applicable, and the payment you will receive at vesting, if any. . Furthermore, certain decisions made by MS & Co., as calculation agent, may require it to exercise discretion and make subjective judgments, such as regarding the occurrence or non-occurrence of market disruption events, the selection of an index successor, or the calculation of the final stock price in If the underlying stock stops or there is market turmoil. These potential self-determinations may adversely affect your payment at maturity, if any. For more information regarding these types of determinations, see “Description of Securities – Postponing Valuation Date(s), “- Discontinuing Any Shares of an ETF and/or Underlying Stock Index; Changing Calculation Method,” “- Calculating Alternative Exchange in Case Occurrence of an Event of Default” and “Agent and Accounts” in the accompanying product supplement. In addition, MS & Co. Determine the estimated value of the securities on the pricing date.
￭Hedging and trading activity by our subsidiaries has the potential to adversely affect the value of securities. One or more of our affiliates and/or third party dealers expects to perform hedging activities relating to securities (and other instruments related to the underlying stocks or the underlying stock index), including trading in the underlying stocks and other instruments related to the underlying stocks or the underlying stock index. As a result, these entities may unwind or modify hedging positions during the term of the securities, and the hedging strategy may involve greater and more frequent dynamic adjustments to the hedge as the valuation date approaches. Some of our subsidiaries also trade stocks that constitute the underlying index of stocks and other financial instruments related to the underlying stocks on a regular basis as part of their general brokerage and other business. Any such hedging or trading activities on or prior to the pricing date would likely increase the price of the initial stock and, therefore, could increase the downside threshold level, which is the level at or above which the underlying shares must close on the valuation date. That investors do not incur a significant loss on their initial investment in the securities. In addition, such hedging or trading activities during the term of the securities, including on the valuation date, could adversely affect