AUS
NZ
UK
CA
USA
IND
Morgan Stanley Finance LLC has launched Jump Securities totaling $1,335,000 in aggregate principal amount, featuring an Auto-Callable option linked to the Russell 2000 Index, maturing on July 26, 2029. These principal-at-risk securities, fully guaranteed by Morgan Stanley, were priced on July 23, 2026, and include automatic early redemption if the index surpasses predetermined performance benchmarks. Investors risk losing their entire principal if the index falls significantly below its initial level.
Key Points
- NYSE ticker: MS-PQ
- Morgan Stanley Finance LLC issued $1,335,000 in Jump Securities with an auto-callable feature linked to the Russell 2000 Index
- Each security has a stated principal amount of $1,000; original issue date: July 28, 2026; maturity date: July 26, 2029
- Automatic early redemption pays $1,134.50 per security if the Russell 2000 closes at or above 2,940.163 on the first determination date, July 30, 2027
- Full principal loss occurs if the index closes below 2,352.130 (80% of initial level) at maturity
Investment Structure and Pricing Overview
Morgan Stanley Finance LLC issued these Jump Securities as unsecured obligations fully and unconditionally guaranteed by Morgan Stanley. Priced on July 23, 2026, with an original issue date of July 28, 2026, and maturity on July 26, 2029, each security carries a stated principal amount of $1,000, totaling $1,335,000. Although issued at $1,000 per security, the estimated value at pricing was $968.20 per security, reflecting issuance, sales, structuring, and hedging costs borne by investors.
The public price was set at $1,000 per security, with agent commissions and fees totaling $20 per security ($28,035 aggregate). Selected dealers and financial advisors receive a fixed $20 sales commission plus a $1 structuring fee per security. After commissions and fees, Morgan Stanley Finance LLC received proceeds of $1,306,965. Morgan Stanley & Co. LLC, a wholly owned subsidiary and affiliate of MSFL, served as distribution agent.
Automatic Early Redemption Terms
The securities include an automatic early redemption feature triggered if the Russell 2000 Index meets specified criteria. The initial index level was 2,940.163, established on the strike date of July 23, 2026. The call threshold is set at 100% of the initial level (2,940.163). If the index closes at or above this level on the first determination date, July 30, 2027, the securities will be automatically redeemed.
Upon early redemption, investors receive $1,134.50 per security on August 4, 2027, representing approximately a 13.45% premium over principal. No further payments are made post-redemption. The first determination date may be postponed due to non-trading days or market disruptions as detailed in the filing.
Maturity Payment and Performance Scenarios
If not redeemed early, maturity payments depend on the Russell 2000 Index's final level on July 23, 2029. Three payment scenarios are outlined based on index performance relative to the initial level of 2,940.163.
If the final level exceeds the initial level, investors receive the stated principal plus an upside payment calculated at a 150% participation rate on the index's gain. The upside payment equals the stated principal multiplied by 150% and the percentage change of the index. If the final level is at or below the initial level but remains at or above the downside threshold of 2,352.130 (80% of initial), investors receive only the stated principal.
Principal-at-Risk and Loss Conditions
These securities expose investors to principal risk if the Russell 2000 Index declines sharply over the three-year term. The downside threshold is 2,352.130 (80% of initial level). If the final index level falls below this, investors receive a reduced payment based on the ratio of the final level to the initial level.
In adverse scenarios, payments can be significantly below principal, potentially zero. For example, a 20% or greater decline in the index results in a proportional loss of principal. Investors must accept the risk of losing their entire initial investment as disclosed.
Credit Risk and Guarantee Details
All payments depend on Morgan Stanley's creditworthiness. The securities are unsecured obligations of Morgan Stanley Finance LLC, fully and unconditionally guaranteed by Morgan Stanley. Investors have no security interest in underlying assets. The guarantee's strength relies solely on Morgan Stanley's ability to fulfill obligations.
These securities are not bank deposits, are not FDIC insured, and are not guaranteed by any governmental agency or bank. Investors bear credit risk of Morgan Stanley as the guarantor.
Valuation and Pricing Methodology
The estimated value of $968.20 per security on pricing date reflects issuance, sales, structuring, and hedging costs. Morgan Stanley used proprietary pricing models, market data, and assumptions about the Russell 2000 Index, volatility, interest rates, and credit spreads to determine economic terms.
An internal funding rate, likely lower than secondary market credit spreads, was used, favoring Morgan Stanley. Lower costs or higher funding rates could have improved terms for investors. Secondary market prices may be lower than estimated values due to credit spreads, bid-ask spreads, and other factors.
Registration and Index Information
The securities were issued under Registration Statement Nos. 333-293641 and 333-293641-01, with the pricing supplement filed under Rule 424(b)(2) on July 27, 2026. They are part of Morgan Stanley Finance LLC's Series A Global Medium-Term Notes program, identified by CUSIP 61781GZ53 and ISIN US61781GZ534. These securities will not be listed on any exchange.
The Russell 2000 Index is the underlying benchmark, with initial and strike dates on July 23, 2026, setting the initial level at 2,940.163. Determination and maturity dates may be postponed for non-trading days or market disruptions as outlined in related documentation.
Investor Suitability and Risk Considerations
These securities suit investors willing to risk their principal and forego current income for potential early redemption or maturity payments exceeding principal. Investors must accept the possibility of total loss. The securities lack periodic interest payments; returns depend solely on Russell 2000 Index appreciation.
The investment term is three years, from July 28, 2026, to July 26, 2029, with the critical first determination date on July 30, 2027. Investors should carefully assess whether potential upside justifies principal risk.
Comprehensive Documentation and Disclosures
Full terms are detailed in the product supplement for Principal at Risk Securities dated April 8, 2026, along with index, tax supplements, and prospectus dated April 8, 2026. Additional terms appear at the end of the pricing supplement. Investors are urged to review all documents thoroughly before investing.
Morgan Stanley disclosed that the SEC and state regulators have neither approved nor disapproved these securities or verified the completeness of the pricing supplement. Any contrary representation is a criminal offense. All linked documentation provides essential information on terms, risks, and features.
