MORGAN STANLEY — Capital/Financing Update 2010

Aug 23, 2010

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Pricing Sheet dated August 19, 2010 relating to Preliminary Terms No. 498 dated August 18, 2010 to Registration Statement No. 333-156423 Filed pursuant to Rule 433

STRUCTURED INVESTMENTS

Opportunities in U.S. Equities

Two ELKS ® Each Based Upon a Different Common Stock

Equity LinKed Securities (“ELKS ® ”)

PRICING TERMS FOR ALL ELKS – AUGUST 19, 2010
Issuer:	Morgan Stanley
Stated principal amount:	$10 per ELKS
Issue price:	$10 per ELKS
Payment at maturity:	If on any trading day from but excluding the pricing date to and including the valuation date: · the closing price has not decreased to or below the downside threshold price, then you will receive an amount in cash equal to $10 per ELKS; or · the closing price has decreased to or below the downside threshold price, then you will receive shares of the underlying equity in exchange for each ELKS in an amount equal to the equity ratio per ELKS or, if we so elect, the cash value (determined as of the valuation date) of such shares. The value of those shares of the underlying equity or that cash, as applicable, may be significantly less than the stated principal amount of the ELKS and may be zero.
Observation price:	Closing price
Initial equity price:	The initial equity price for each ELKS will be the closing price of the underlying equity on the pricing date. See “Specific Terms for Each ELKS—Initial equity price” below.
Equity ratio:	For each ELKS, the stated principal amount divided by the initial equity price, subject to adjustments for certain corporate events affecting the underlying equity issuer. See “Specific Terms for Each ELKS—Equity ratio” below.
Pricing date:	August 19, 2010
Original issue date:	August 24, 2010 (3 business days after the pricing date)
Listing:	The ELKS will not be listed on any securities exchange.
Agent:	Morgan Stanley & Co. Incorporated (“MS & Co.”), a wholly-owned subsidiary of Morgan Stanley. See “Supplemental information regarding plan of distribution; conflicts of interest” in the accompanying preliminary terms.
SPECIFIC TERMS FOR EACH ELKS

Underlying equity:	Bank of America Corporation common stock	JPMorgan Chase & Co. common stock
Underlying equity issuer:	Bank of America Corporation (“BAC”)	JPMorgan Chase & Co. (“JPM”)
Maturity date:	April 13, 2011	April 13, 2011
Coupon:	13.00% per annum (approximately equivalent to $0.8269 per ELKS for the term of the ELKS), paid monthly and calculated on a 30/360 basis.	11.75% per annum (approximately equivalent to $0.7474 per ELKS for the term of the ELKS), paid monthly and calculated on a 30/360 basis.
Coupon payment dates:	Monthly, on the 13th of each month, beginning on September 13, 2010	Monthly, on the 13th of each month, beginning on September 13, 2010
Downside threshold price:	$9.765, which is 75% of the initial equity price	$27.8025, which is 75% of the initial equity price
Valuation date:	April 8, 2011, subject to adjustment for non-trading days and certain market disruption events	April 8, 2011, subject to adjustment for non-trading days and certain market disruption events
CUSIP:	61759G745	61759G737
ISIN:	US61759G7455	US61759G7372
Initial equity price:	$13.02	$37.07
Equity ratio:	0.76805	0.26976
Aggregate principal amount:	$3,000,000	$3,000,000

Commissions and Issue Price:	Per BAC ELKS	Total	Per JPM ELKS	Total
Price to public	$10	$3,000,000	$10	$3,000,000
Agent’s commissions (1)	$0.09	$27,000	$0.09	$27,000
Proceeds to issuer	$9.91	$2,973,000	$9.91	$2,973,000

(1) Selected dealers, including Morgan Stanley Smith Barney LLC (an affiliate of the Agent), and their financial advisors will collectively receive from the Agent, MS & Co., fixed sales commissions of $0.09 for each BAC ELKS and $0.09 for each JPM ELKS they sell. For additional information, see “Supplemental information regarding plan of distribution; conflicts of interest” in the accompanying preliminary terms and “Plan of Distribution (Conflicts of Interest)” in the accompanying prospectus supplement for ELKS.

You should read this document together with the preliminary terms describing the offering and the related prospectus supplement and prospectus, each of which can be accessed via the hyperlinks below.

EFPlaceholder Preliminary Terms No. 498 dated August 18, 2010

EFPlaceholder Prospectus Supplement for ELKS dated February 9, 2010

EFPlaceholder Prospectus dated December 23, 2008

The ELKS are not bank deposits and are not insured or guaranteed by the Federal Deposit Insurance Corporation or any other governmental agency, nor are they obligations of, or guaranteed by, a bank.

The issuer has filed a registration statement (including a prospectus) with the SEC for the offering to which this communication relates. Before you invest, you should read the prospectus in that registration statement and other documents the issuer has filed with the SEC for more complete information about the issuer and the offering. You may get these documents for free by visiting EDGAR on the SEC Web site at www.sec.gov. Alternatively, the issuer, any underwriter or any dealer participating in the offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-584-6837 .