Morgan Stanley Finance LLC filed a Free Writing Prospectus to Preliminary Pricing Supplement No. 19,718 on November 2, 2026, outlining terms for Worst-of RTY and SPX Dual Directional Trigger PLUS securities due December 5, 2030.

Key Highlights

  • Issuer and guarantor: Morgan Stanley Finance LLC is the issuer; Morgan Stanley is the guarantor of all payments.
  • Underliers: The securities are linked to the worst performing of the Russell 2000 Index (RTY) and the S&P 500 Index (SPX).
  • Leverage factor: 130.50% to 145.50% applies to upside scenarios; the hypothetical payment table assumes 130.50%.
  • Absolute return participation rate: 50% applies when the worst performing underlier depreciates but remains above the 70% downside threshold level.
  • Estimated value: $955.80 per security, or within $45.00 of that estimate, against a stated principal amount of $1,000.
  • Key dates: Pricing date is November 30, 2026; observation date is December 2, 2030; maturity date is December 5, 2030.
  • CUSIP: 61781TLT8, under Registration Statement Nos. 333-293641 and 333-293641-01.

Structure and Payoff Terms of the Worst-of Dual Directional PLUS Offering

According to the filing, Morgan Stanley Finance LLC (MSFL) is offering structured securities whose payment at maturity depends solely on the performance of the worst performing underlier between the Russell 2000 Index and the S&P 500 Index. The downside threshold level is set at 70% of the initial level for each underlier, meaning if either index closes below that level on the observation date, principal protection is lost.

The filing provides hypothetical payment scenarios to illustrate the payoff structure. If the worst performing underlier appreciates 5%, investors would receive $1,065.25 per security. If it depreciates 5% but remains above the threshold, investors would receive $1,025.00 per security under the absolute return participation feature. However, if the worst performing underlier depreciates 85%, investors would receive only $150.00 per security, representing a loss of 85% of principal. At a hypothetical 100% appreciation, the payment would be $2,305.00 per security, assuming a leverage factor of 130.50%.

The filing states the estimated value of the securities is $955.80 per security, less than the $1,000 stated principal amount, and attributes this difference to "costs associated with issuing, selling, structuring and hedging the securities in the original issue price." The filing further discloses that the securities will not be listed on any securities exchange, that secondary trading may be limited, and that "the securities do not guarantee the return of any principal and do not pay interest." All payments are described as subject to the credit risk of Morgan Stanley and MSFL. The filing also notes that MSFL "has no independent operations and will have no independent assets."

What Was Disclosed

MSFL filed terms for structured notes linked to the worst of RTY and SPX, with a leverage factor of 130.50% to 145.50%, a 50% absolute return participation rate, a 70% downside threshold, an estimated value of $955.80 per security, and a maturity date of December 5, 2030.