Morgan Stanley Finance LLC filed a free writing prospectus on October 28, 2026, for Preliminary Pricing Supplement No. 19,744, describing SPUMP40 Buffered Jump Securities with an auto-callable feature due November 17, 2031, linked to the S&P U.S. Equity Momentum 40% VT 4% Decrement Index.

Key Highlights

  • Issuer and guarantor: Morgan Stanley Finance LLC is the issuer; Morgan Stanley (NYSE:MS) is the guarantor, with all payments subject to their credit risk.
  • Underlier: The securities are linked to the S&P U.S. Equity Momentum 40% VT 4% Decrement Index (SPUMP40), which was established on March 14, 2022.
  • Estimated value: $901.90 per security, or within $51.90 of that estimate, against a $1,000 face amount implied by the payment schedule.
  • Buffer and call threshold: A 15% buffer protects principal at maturity (85% maximum loss); the call threshold is set at 85% of the initial level.
  • Auto-call schedule: 48 monthly determination dates run from November 15, 2027 through October 13, 2031, with early redemption payments ranging from $1,120.00-$1,130.00 (date 1) to $1,590.00-$1,639.167 (date 48).
  • Pricing and maturity dates: The pricing date is November 12, 2026; the final determination date and maturity date are November 12, 2031 and November 17, 2031, respectively.
  • CUSIP: 61781TC92, registered under Registration Statement Nos. 333-293641 and 333-293641-01.

Structure and Payment Terms of the SPUMP40 Securities

According to the filing, Morgan Stanley Finance LLC is offering structured securities tied to the SPUMP40 index, which applies a 4% per annum decrement that, as the filing discloses, "will adversely affect the performance of the Index in all cases, whether the Index appreciates or depreciates." The index also uses significant leverage and may not be fully invested at all times, both of which the filing lists as specific risk factors for holders of these securities.

The filing describes a hypothetical maturity payment table showing that a holder who is not redeemed early would receive $1,600.00 per security for underlier changes ranging from -15.00% to +100.00%, assuming a call return of approximately 12.00% per annum. However, a -16.00% change would yield $990.00 per security, a -50.00% change would yield $650.00, and a -100.00% change would yield $150.00 per security, illustrating the 85% maximum loss exposure after the buffer is exhausted.

For the automatic early redemption feature, the filing specifies that securities are called if the underlier's closing level on any of the 48 monthly determination dates is at or above 85% of the initial level. A hypothetical example in the filing shows that a -20% underlier change on determination date 1 would not trigger redemption, while a +30% change on determination date 2 would result in a payment of $1,130.00 per security. The filing also notes that the estimated value of $901.90 is below the original issue price because of costs associated with "issuing, selling, structuring and hedging the securities."

What Was Disclosed

Morgan Stanley Finance LLC filed a free writing prospectus for structured notes linked to a momentum-based equity index with a built-in 4% annual decrement, a 15% principal buffer at maturity, 48 monthly auto-call opportunities, and an estimated per-security value of $901.90, with a scheduled maturity of November 17, 2031.