Morgan Stanley to sell 0% optimal entry PLUS linked to price of gold

By E. Janene Geiss

Philadelphia, Nov. 25 - Morgan Stanley plans to price 0% optimal entry Performance Leveraged Upside Securities due Dec. 13, 2010 linked to the price of gold, according to an FWP filing with the Securities and Exchange Commission.

The payout at maturity will be par plus 135% of any gain in the price of gold, up to a maximum payout of 118.2%, or $1,182. The exact cap will be set at pricing.

If the price of gold decreases, investors will share in any losses.

The final price of gold will be the arithmetic average of gold's closing price on five consecutive trading days ending Dec. 6, 2010.

The initial price will be gold's lowest level from the pricing date through Jan. 12, 2010.

The notes are expected to price Nov. 27 and settle in Dec. 4.

Morgan Stanley & Co. Inc. is the agent.

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