MORGAN STANLEY SPECTRUM SELECT LP - 10-Q Quarterly Report

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

[X] Quarterly report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended June 30, 2002 or

[ ] Transition report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the transition period from to__________________

Commission File Number 0-19511

MORGAN STANLEY SPECTRUM SELECT L.P.

(Exact name of registrant as specified in its charter)

Delaware 13-3619290
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

Demeter Management Corporation
c/o Managed Futures Department
825 Third Ave., 8th Floor, New York, NY 10022
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code (201) 209-8400

(Former name, former address, and former fiscal year, if changed
since last report)

Indicate by check-mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing
requirements for the past 90 days.

Yes X No___________

MORGAN STANLEY SPECTRUM SELECT L.P.

INDEX TO QUARTERLY REPORT ON FORM 10-Q

June 30, 2002

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

MORGAN STANLEY SPECTRUM SELECT L.P.
STATEMENTS OF FINANCIAL CONDITION

MORGAN STANLEY SPECTRUM SELECT L.P.
STATEMENTS OF OPERATIONS
(Unaudited)

MORGAN STANLEY SPECTRUM SELECT L.P.
STATEMENTS OF OPERATIONS
(Unaudited)

MORGAN STANLEY SPECTRUM SELECT L.P.
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
For the Six Months Ended June 30, 2002 and 2001
(Unaudited)

MORGAN STANLEY SPECTRUM SELECT L.P.
STATEMENTS OF CASH FLOWS
(Unaudited)

MORGAN STANLEY SPECTRUM SELECT L.P.
NOTES TO FINANCIAL STATEMENTS

June 30, 2002

(Unaudited)

The unaudited financial statements contained herein include, in
the opinion of management, all adjustments necessary for a fair
presentation of the results of operations and financial condition
of Morgan Stanley Spectrum Select L.P. (the "Partnership"). The
financial statements and condensed notes herein should be read in
conjunction with the Partnership's December 31, 2001 Annual Report
on Form 10-K.

1. Organization
Morgan Stanley Spectrum Select L.P. is a Delaware limited
partnership organized to engage primarily in the speculative
trading of futures contracts, options on futures contracts, and
forward contracts on physical commodities and other commodity
interests, including, but not limited to foreign currencies,
financial instruments, metals, energy and agricultural products.
The Partnership is one of the Morgan Stanley Spectrum Series of
funds, comprised of the Partnership, Morgan Stanley Spectrum
Commodity L.P., Morgan Stanley Spectrum Currency L.P., Morgan
Stanley Spectrum Global Balanced L.P., Morgan Stanley Spectrum
Strategic L.P., and Morgan Stanley Spectrum Technical L.P.

MORGAN STANLEY SPECTRUM SELECT L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

The general partner for the Partnership is Demeter Management
Corporation ("Demeter"). The non-clearing commodity broker is
Morgan Stanley DW Inc. ("Morgan Stanley DW"). The clearing
commodity brokers are Morgan Stanley & Co., Inc. ("MS & Co.") and
Morgan Stanley & Co. International Limited ("MSIL"). Demeter,
Morgan Stanley DW, MS & Co., and MSIL are wholly-owned
subsidiaries of Morgan Stanley. The trading advisors to the
Partnership are EMC Capital Management, Inc., Rabar Market
Research, Inc., Sunrise Capital Management, Inc., and Northfield
Trading L.P. (collectively, the "Trading Advisors").

Effective June 20, 2002, Morgan Stanley Dean Witter & Co. changed
its name to Morgan Stanley.

2. Related Party Transactions
The Partnership's cash is on deposit with Morgan Stanley DW, MS &
Co., and MSIL in futures, forwards, and options trading accounts
to meet margin requirements as needed. Morgan Stanley DW pays
interest on these funds based on a prevailing rate on U.S.
Treasury bills. The Partnership pays brokerage fees to Morgan
Stanley DW.

MORGAN STANLEY SPECTRUM SELECT L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

3. Financial Instruments
The Partnership trades futures contracts, options on futures
contracts, and forward contracts on physical commodities and other
commodity interests, including, but not limited to foreign
currencies, financial instruments, metals, energy and agricultural
products. Futures and forwards represent contracts for delayed
delivery of an instrument at a specified date and price. Risk
arises from changes in the value of these contracts and the
potential inability of counterparties to perform under the terms
of the contracts. There are numerous factors which may
significantly influence the market value of these contracts,
including interest rate volatility.

The market value of contracts is based on closing prices quoted
by the exchange, bank or clearing firm through which the
contracts are traded.

The Partnership's contracts are accounted for on a trade-date
basis and marked to market on a daily basis. The Partnership
accounts for its derivative investments in accordance with the
provisions of Statement of Financial Accounting Standard No. 133,
"Accounting for Derivative Instruments and Hedging Activities"

MORGAN STANLEY SPECTRUM SELECT L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

("SFAS No. 133"). SFAS No. 133 defines a derivative as a
financial instrument or other contract that has all three of the
following characteristics:

1) One or more underlying notional amounts or payment
provisions;
2) Requires no initial net investment or a smaller initial net
investment than would be required relative to changes in
market factors;
3) Terms require or permit net settlement.

Generally derivatives include futures, forward, swaps or options
contracts, and other financial instruments with similar
characteristics such as caps, floors and collars.

The net unrealized gains on open contracts, reported as a
component of "Equity in futures interests trading accounts" on the
statements of financial condition, and their longest contract
maturities were as follows:

MORGAN STANLEY SPECTRUM SELECT L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

Net Unrealized Gains
on Open Contracts Longest Maturities
Exchange- Off-Exchange- Exchange- Off-Exchange-
Date Traded Traded Total Traded Traded
$ $ $
Jun. 30, 2002 16,455,680 9,491,514 25,947,194 Jun. 2003 Sep. 2002
Dec. 31, 2001 1,010,544 4,386,192 5,396,736 Dec. 2002 Mar. 2002

The Partnership has credit risk associated with counterparty non-
performance. The credit risk associated with the instruments in
which the Partnership is involved is limited to the amounts
reflected in the Partnership's statements of financial condition.

The Partnership also has credit risk because Morgan Stanley DW, MS
& Co., and MSIL act as the futures commission merchants or the
counterparties, with respect to most of the Partnership's assets.
Exchange-traded futures and futures-styled options contracts are
marked to market on a daily basis, with variations in value
settled on a daily basis. Each of Morgan Stanley DW, MS & Co.,
and MSIL, as a futures commission merchant for the Partnership's
exchange-traded futures and futures-styled options contracts, are
required, pursuant to regulations of the Commodity Futures Trading
Commission ("CFTC"), to segregate from their own assets, and for
the sole benefit of their commodity customers, all funds held by

MORGAN STANLEY SPECTRUM SELECT L.P.
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)

them with respect to exchange-traded futures and futures-styled
options contracts, including an amount equal to the net unrealized
gains on all open futures and futures-styled options contracts,
which funds, in the aggregate, totaled $262,738,330 and
$236,193,605 at June 30, 2002 and December 31, 2001, respectively.
With respect to the Partnership's off-exchange-traded forward
currency contracts, there are no daily settlements of variations
in value nor is there any requirement that an amount equal to the
net unrealized gains on open forward contracts be segregated. With
respect to those off-exchange-traded forward currency contracts,
the Partnership is at risk to the ability of MS & Co., the sole
counterparty on all of such contracts, to perform. The
Partnership has a netting agreement with MS & Co. This agreement,
which seeks to reduce both the Partnership's and MS & Co.'s
exposure on off-exchange-traded forward currency contracts, should
materially decrease the Partnership's credit risk in the event of
MS & Co.'s bankruptcy or insolvency.

Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

Liquidity. The Partnership deposits its assets with Morgan
Stanley DW as non-clearing broker, and MS & Co. and MSIL as
clearing brokers in separate futures, forwards, and options
trading accounts established for each Trading Advisor, which
assets are used as margin to engage in trading. The assets are
held in either non-interest bearing bank accounts or in securities
and instruments permitted by the CFTC for investment of customer
segregated or secured funds. The Partnership's assets held by the
commodity brokers may be used as margin solely for the
Partnership's trading. Since the Partnership's sole purpose is to
trade in futures, forwards, and options, it is expected that the
Partnership will continue to own such liquid assets for margin
purposes.

The Partnership's investment in futures, forwards, and options
may, from time to time, be illiquid. Most U.S. futures exchanges
limit fluctuations in prices during a single day by regulations
referred to as "daily price fluctuations limits" or "daily
limits". Trades may not be executed at prices beyond the daily
limit. If the price for a particular futures or options contract
has increased or decreased by an amount equal to the daily limit,
positions in that futures or options contract can neither be taken
nor liquidated unless traders are willing to effect trades at or

within the limit. Futures prices have occasionally moved the
daily limit for several consecutive days with little or no
trading. These market conditions could prevent the Partnership
from promptly liquidating its futures or options contracts and
result in restrictions on redemptions.

There is no limitation on daily price moves in trading forward
contracts on foreign currency. The markets for some world
currencies have low trading volume and are illiquid, which may
prevent the Partnership from trading in potentially profitable
markets or prevent the Partnership from promptly liquidating
unfavorable positions in such markets, subjecting it to
substantial losses. Either of these market conditions could
result in restrictions on redemptions.

There are no material trends, events, or uncertainties known at
the present time that will result in or that are reasonably likely
to result in the Partnership's liquidity increasing or decreasing
in any material way.

The Partnership has never had illiquidity affect a material
portion of its assets.

The Partnership has no off-balance sheet arrangements, nor
contractual obligations or commercial commitments to make future
payments that would affect the Partnership's liquidity or capital
resources. The contracts traded by the Partnership are accounted
for on a trade-date basis and marked to market on a daily basis.
The value of foreign currency forward contracts is based on the
spot rate as of the close of business, New York City time, on a
given day.

Capital Resources. The Partnership does not have, nor expect to
have, any capital assets. Redemptions, exchanges, and sales of
additional units of limited partnership interest ("Unit(s)") in
the future will affect the amount of funds available for
investment in futures, forwards, and options in subsequent
periods. It is not possible to estimate the amount and therefore,
the impact of future redemptions of Units.

There are no known material trends, favorable or unfavorable, nor
any expected material changes to the Partnership's capital
resource arrangements at the present time.

Results of Operations
General. The Partnership's results depend on the Trading Advisors
and the ability of the Trading Advisors' trading programs to take

advantage of price movements or other profit opportunities in the
futures, forwards, and options markets. The following presents a
summary of the Partnership's operations for the three and six
month periods ended June 30, 2002 and 2001, and a general
discussion of its trading activities during each period. It is
important to note, however, that the Trading Advisors trade in
various markets at different times and that prior activity in a
particular market does not mean that such market will be actively
traded by the Trading Advisors or will be profitable in the
future. Consequently, the results of operations of the
Partnership are difficult to discuss other than in the context of
the Trading Advisors' trading activities on behalf of the
Partnership and how the Partnership has performed in the past.

The Partnership's results of operations are set forth in financial
statements prepared in accordance with United States generally
accepted accounting principles, which require the use of certain
accounting policies that affect the amounts reported in these
financial statements, including the following. The contracts the
Partnership trades are accounted for on a trade-date basis and
marked to market on a daily basis. The difference between their
cost and market value is recorded on the Statements of Operations
as "Net change in unrealized profit/loss" for open (unrealized)
contracts, and recorded as "Realized profit/loss" when open

positions are closed out, and the sum of these amounts constitutes
the Partnership's trading revenues. Earned interest income
revenue, as well as management fees, incentive fees and brokerage
fees expenses of the Partnership are recorded on an accrual basis.
Demeter believes that, based on the nature of the operations of
the Partnership, no assumptions other than those presently used
relating to the application of critical accounting policies are
reasonably plausible that could affect reported amounts.

For the Quarter and Six Months Ended June 30, 2002
For the quarter ended June 30, 2002, the Partnership recorded
total revenues, including interest income, of $35,775,689 and
posted an increase in net asset value per Unit. The most
significant gains of approximately 15.8% were recorded in the
currency markets primarily during May and June from previously
established long positions in the euro, Swiss franc and Japanese
yen relative to the U.S. dollar as the value of these currencies
strengthened against the dollar amid falling equity prices,
concerns regarding corporate accounting integrity and weak
economic data. Additional gains of approximately 1.6% were
recorded in the global stock index futures markets from short
positions in U.S and European stock index futures as prices
trended lower on geopolitical concerns and uncertainty
surrounding a global economic recovery. A portion of the

Partnership's overall gains for the quarter was offset by losses
of approximately 2.3% in the energy markets primarily from
previously established long futures positions in crude oil and
its related products as prices moved lower on supply and demand
concerns. Elsewhere in the energy markets, losses were recorded
in natural gas futures from long positions as prices reversed
lower during May on supply and demand concerns. Total expenses
for the three months ended June 30, 2002 were $6,090,700,
resulting in net income of $29,684,989. The net asset value of a
Unit increased from $22.86 at March 31, 2002 to $25.67 at June
30, 2002.

For the six months ended June 30, 2002, the Partnership recorded
total trading revenues, including interest income of $30,809,741
and posted an increase in net asset value per Unit. The most
significant gains of approximately 11.3% were recorded in the
currency markets primarily during May and June from previously
established long positions in the euro, Swiss franc and Japanese
yen relative to the U.S. dollar as the value of these currencies
strengthened against the dollar amid falling equity prices,
concerns regarding corporate accounting integrity and weak
economic data. Additional gains of approximately 0.8% were
recorded in the energy markets primarily during March following a
higher supplies report and forecasts of mild weather for the

Eastern U.S., resulting in gains from previously established
short futures positions. A portion of the Partnership's overall
gains for the year was offset by losses of approximately 0.8% in
the global interest rate futures markets primarily during April
from previously established short Japanese and European interest
rate futures as prices trended higher, drawing strength from
declining equity prices. Total expenses for the six months ended
June 30, 2002 were $12,156,252, resulting in net income of
$18,653,489. The net asset value of a Unit increased from $23.96
at December 31, 2001 to $25.67 at June 30, 2002.

For the Quarter and Six Months Ended June 30, 2001
For the quarter ended June 30, 2001, the Partnership recorded
total trading losses, net of interest income, of $16,536,822 and
posted a decrease in net asset value per Unit. The most
significant losses of approximately 4.7% were experienced
primarily during April in the global interest rate futures
markets as a portion of previously recorded profits was given
back from long positions in U.S and European interest rate
futures markets as a portion of previously recorded profits was
given back from long positions in U.S. and European interest rate
futures as prices reversed sharply downward, after trending
higher earlier this year, as investors deserted fixed income
securities in an asset shift to equities. Losses were also

recorded from short positions in U.S. interest rate futures as
prices moved higher in a flurry of flight-to-quality buying
spawned by Middle East instability on June 22nd and in
anticipation of the Federal Reserve interest rate cut in late
June. Additional losses were recorded during the third week of
June from short positions in German interest rate futures as
prices increased following a drop in German business confidence
data and signs that inflation may have peaked in that region,
strengthening the possibility of European interest rate cuts. In
the global stock index futures markets, losses of approximately
2.3% were incurred primarily during the first half of April from
short positions in DAX Index futures as prices reversed higher on
renewed hopes that the worst may have been over for badly beaten
technology and telecom stocks. During May and June, additional
losses were recorded from DAX Index futures positions as prices
generally moved in an erratic, directionless pattern on
conflicting economic information and investor sentiment. In the
currency markets, losses of approximately 1.3% were recorded
primarily during early June from long positions in the British
pound as its value weakened relative to the U.S. dollar in
reaction to reports that British Prime Minister Blair would push
for Great Britain's entry into the European Monetary Union. In
the metals markets, small losses were experienced primarily
during late May from newly established long gold futures

positions as gold prices sharply reversed lower, after spiking
higher earlier in May, following the return of more bearish
sentiment regarding the outlook for the U.S. economy. These
losses were partially offset by gains of approximately 0.5%
recorded primarily during May and June in the energy markets from
short natural gas futures positions as prices declined on
continued concerns about rising U.S. natural gas inventories and
mild weather across the United States. Total expenses for the
three months ended June 30, 2001 were $6,075,120, resulting in a
net loss of $22,611,942. The net asset value of a Unit decreased
from $26.12 at March 31, 2001 to $23.75 at June 30,2001.

For the six months ended June 30, 2001, the Partnership recorded
total trading revenues, including interest income, of $13,988,194
and posted an increase in net asset value per Unit. The most
significant gains of approximately 3.7% were recorded during
January in the global interest rate futures markets from long
positions in Japanese government bond futures as prices moved
higher on concerns regarding that country's economy. During May
and June, profits were recorded from long positions in Japanese
interest rate futures as prices rose in response to Japanese
government's pledge for fiscal reform. Additional gains were
recorded throughout the majority of the first quarter from long
positions in eurodollar futures as prices rose amid a rattled

stock market, shaky consumer confidence, positive inflation data
and interest rate cuts by the U.S. Federal Reserve. In the
currency markets, profits of approximately 2.0% were recorded
throughout a majority of the first quarter from short positions
in the Japanese yen as its value weakened relative to the U.S.
dollar on continuing concerns for the Japanese economy and in
both anticipation and reaction to the Bank of Japan's decision to
reinstate its zero interest rate policy. In the metals markets,
gains of approximately 0.6% were recorded from short copper
futures positions as the slowdown in the U.S. economy and weak
demand continued to drive prices lower. These gains were
partially offset by losses of approximately 1.2% recorded
throughout a majority of the quarter in the energy markets from
long positions in natural gas futures as prices reversed the
sharp upward trend experienced in late 2000 amid bearish
inventory data and forecasts for favorable weather. In the
agricultural markets, losses of approximately 0.3% were
experienced primarily during the first quarter from long corn
futures positions as prices moved lower due to favorable South
American weather. Total expenses for the six months ended June
30, 2001 were $12,553,302, resulting in net income of $1,434,892.
The net asset value of a Unit increased from $23.57 at December
31, 2000 to $23.75 at June 30, 2001.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK

Introduction
The Partnership is a commodity pool engaged primarily in the
speculative trading of futures, forwards, and options. The
market-sensitive instruments held by the Partnership are acquired
for speculative trading purposes only and, as a result, all or
substantially all of the Partnership's assets are at risk of
trading loss. Unlike an operating company, the risk of market-
sensitive instruments is central, not incidental, to the
Partnership's main business activities.

The futures, forwards, and options traded by the Partnership
involve varying degrees of related market risk. Market risk is
often dependent upon changes in the level or volatility of
interest rates, exchange rates, and prices of financial
instruments and commodities. Fluctuations in market risk based
upon these factors result in frequent changes in the fair value
of the Partnership's open positions, and, consequently, in its
earnings and cash flow.

The Partnership's total market risk is influenced by a wide
variety of factors, including the diversification among the
Partnership's open positions, the volatility present within the
markets, and the liquidity of the markets. At different times,

each of these factors may act to increase or decrease the market
risk associated with the Partnership.

The Partnership's past performance is not necessarily indicative
of its future results. Any attempt to numerically quantify the
Partnership's market risk is limited by the uncertainty of its
speculative trading. The Partnership's speculative trading may
cause future losses and volatility (i.e., "risk of ruin") that
far exceed the Partnership's experience to date or any reasonable
expectations based upon historical changes in market value.

Quantifying the Partnership's Trading Value at Risk
The following quantitative disclosures regarding the Partnership's
market risk exposures contain "forward-looking statements" within
the meaning of the safe harbor from civil liability provided for
such statements by the Private Securities Litigation Reform Act of
1995 (set forth in Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934). All
quantitative disclosures in this section are deemed to be forward-
looking statements for purposes of the safe harbor, except for
statements of historical fact.

The Partnership accounts for open positions on the basis of mark-
to-market accounting principles. Any loss in the market value of
the Partnership's open positions is directly reflected in the

Partnership's earnings, whether realized or unrealized, and its
cash flow. Profits and losses on open positions of exchange-
traded futures, forwards, and options are settled daily through
variation margin.

The Partnership's risk exposure in the market sectors traded by
the Trading Advisors is estimated below in terms of Value at Risk
("VaR"). The VaR model used by the Partnership includes many
variables that could change the market value of the Partnership's
trading portfolio. The Partnership estimates VaR using a model
based upon historical simulation with a confidence level of 99%.
Historical simulation involves constructing a distribution of
hypothetical daily changes in the value of a trading portfolio.
The VaR model takes into account linear exposures to price and
interest rate risk. Market risks that are incorporated in the
VaR model include equity and commodity prices, interest rates,
foreign exchange rates, and correlation among these variables.
The hypothetical changes in portfolio value are based on daily
percentage changes observed in key market indices or other market
factors ("market risk factors") to which the portfolio is
sensitive. The historical observation period of the Partner-
ship's VaR is approximately four years. The one-day 99%
confidence level of the Partnership's VaR corresponds to the
negative change in portfolio value that, based on observed market
risk factors, would have been exceeded once in 100 trading days.

In other words, one-day VaR for a portfolio is a number such that
losses in this portfolio are estimated to exceed the VaR only one
day in 100.

VaR is calculated using historical simulation. Demeter uses
approximately four years of daily market data (1,000
observations) and revalues its portfolio (using delta-gamma
approximations) for each of the historical market moves that
occurred over the time period. This generates a probability
distribution of daily 'simulated profit and loss' outcomes. The
VaR is the appropriate percentile of this distribution. For
example, the 99% one-day VaR would represent the 10th worst
outcome from Demeter's simulated profit and loss series.

VaR models, including the Partnership's, are continuously
evolving as trading portfolios become more diverse and modeling
techniques and systems capabilities improve. Please note that
the VaR model is used to numerically quantify market risk for
historic reporting purposes only and is not utilized by either
Demeter or the Trading Advisors in their daily risk management
activities. Please further note that VaR as described above may
not be comparable to similarly titled measures used by other
entities.

The Partnership's Value at Risk in Different Market Sectors
The following table indicates the VaR associated with the
Partnership's open positions as a percentage of total net assets
by primary market risk category at June 30, 2002 and 2001. At
June 30, 2002 and 2001, the Partnership's total capitalization
was approximately $272 million and $229 million, respectively.
Primary Market June 30, 2002 June 30, 2001
Risk Category Value at Risk Value at Risk

Currency (1.62)% (2.21)%
Interest Rate (1.35) (0.76)
Equity (0.55) (0.33)
Commodity (0.78) (0.72)
Aggregate Value at Risk (2.44)% (2.27)%

The VaR for a market category represents the one-day downside risk
for the aggregate exposures associated with this market category.
The aggregate VaR, listed above for the Partnership, represents
the aggregate VaR of the Partnership's open positions across all
the market categories, and is less than the sum of the VaRs for
all such market categories due to the diversification benefit
across asset classes.

The table above represents the VaR of the Partnership's open
positions at June 30, 2002 and 2001 only and is not necessarily
representative of either the historic or future risk of an

investment in the Partnership. Because the Partnership's only
business is the speculative trading of futures, forwards, and
options, the composition of its trading portfolio can change
significantly over any given time period, or even within a single
trading day. Any changes in open positions could positively or
negatively materially impact market risk as measured by VaR.

The table below supplements the quarter-end VaR by presenting the
Partnership's high, low, and average VaR, as a percentage of
total net assets for the four quarterly reporting periods from
July 1, 2001 through June 30, 2002.

Primary Market Risk Category High Low Average
Currency (2.02) (0.46) (1.17)
Interest Rate (1.46) (0.49) (1.18)
Equity (0.71) (0.30) (0.47)
Commodity (1.62) (0.40) (0.87)
Aggregate Value at Risk (2.54) (1.69) (2.24)

Limitations on Value at Risk as an Assessment of Market Risk
The face value of the market sector instruments held by the
Partnership is typically many times the applicable margin
requirements. Margin requirements generally range between 2% and
15% of contract face value. Additionally, the use of leverage
causes the face value of the market sector instruments held by the

Partnership to typically be many times the total capitalization of
the Partnership. The value of the Partnership's open positions
thus creates a "risk of ruin" not typically found in other
investments. The relative size of the positions held may cause
the Partnership to incur losses greatly in excess of VaR within a
short period of time, given the effects of the leverage employed
and market volatility. The VaR tables above, as well as the past
performance of the Partnership, give no indication of such "risk
of ruin". In addition, VaR risk measures should be viewed in light
of the methodology's limitations, which include the following:
? past changes in market risk factors will not always result in
accurate predictions of the distributions and correlations of
future market movements;
? changes in portfolio value caused by market movements may
differ from those of the VaR model;
? VaR results reflect past trading positions while future risk
depends on future positions;
? VaR using a one-day time horizon does not fully capture the
market risk of positions that cannot be liquidated or hedged
within one day; and
? the historical market risk factor data used for VaR estimation
may provide only limited insight into losses that could be
incurred under certain unusual market movements.

The VaR tables above present the results of the Partnership's VaR
for each of the Partnership's market risk exposures and on an
aggregate basis at June 30, 2002, and 2001, and for the end of the
four quarterly reporting periods from July 1, 2001 through June
30, 2002. Since VaR is based on historical data, VaR should not
be viewed as predictive of the Partnership's future financial
performance or its ability to manage or monitor risk. There can
be no assurance that the Partnership's actual losses on a
particular day will not exceed the VaR amounts indicated above or
that such losses will not occur more than once in 100 trading
days.

Non-Trading Risk
The Partnership has non-trading market risk on its foreign cash
balances not needed for margin. These balances and any market
risk they may represent are immaterial.

At June 30, 2002, the Partnership's cash balance at Morgan Stanley
DW was approximately 79% of its total net asset value. A decline
in short-term interest rates will result in a decline in the
Partnership's cash management income. This cash flow risk is not
considered to be material.

Materiality, as used throughout this section, is based on an
assessment of reasonably possible market movements and any

associated potential losses, taking into account the leverage,
optionality and multiplier features of the Partnership's market-
sensitive instruments, in relation to the Partnership's net assets.

Qualitative Disclosures Regarding Primary Trading Risk Exposures
The following qualitative disclosures regarding the Partnership's
market risk exposures - except for (A) those disclosures that are
statements of historical fact and (B) the descriptions of how the
Partnership manages its primary market risk exposures - constitute
forward-looking statements within the meaning of Section 27A of
the Securities Act and Section 21E of the Securities Exchange Act.
The Partnership's primary market risk exposures as well as the
strategies used and to be used by Demeter and the Trading Advisors
for managing such exposures are subject to numerous uncertainties,
contingencies and risks, any one of which could cause the actual
results of the Partnership's risk controls to differ materially
from the objectives of such strategies. Government interventions,
defaults and expropriations, illiquid markets, the emergence of
dominant fundamental factors, political upheavals, changes in
historical price relationships, an influx of new market
participants, increased regulation and many other factors could
result in material losses as well as in material changes to the
risk exposures and the risk management strategies of the
Partnership. Investors must be prepared to lose all or
substantially all of their investment in the Partnership.

The following were the primary trading risk exposures of the
Partnership at June 30, 2002, by market sector. It may be
anticipated, however, that these market exposures will vary
materially over time.

Currency. The primary market exposure of the Partnership at June
30, 2002 was to the currency complex. The Partnership's currency
exposure is to exchange rate fluctuations, primarily fluctuations
which disrupt the historical pricing relationships between
different currencies and currency pairs. Interest rate changes
as well as political and general economic conditions influence
these fluctuations. The Partnership trades a large number of
currencies, including cross-rates - i.e., positions between two
currencies other than the U.S. dollar. At June 30, 2002, the
Partnership's major exposures were to outright U.S. dollar
positions. Outright positions consist of the U.S. dollar vs.
other currencies. These other currencies include major and minor
currencies. Demeter does not anticipate that the risk profile of
the Partnership's currency sector will change significantly in
the future. The currency trading VaR figure includes foreign
margin amounts converted into U.S. dollars with an incremental
adjustment to reflect the exchange rate risk inherent to the
U.S.-based Partnership in expressing VaR in a functional currency
other than U.S. dollars.

Interest Rate. The second largest market exposure of the

Partnership at June 30, 2002 was to the global interest rate
sector. The Partnership's exposure in the interest rate market
complex was primarily spread across the U.S., European and
Japanese interest rate sectors. Interest rate movements directly
affect the price of the sovereign bond futures positions held by
the Partnership and indirectly affect the value of its stock
index and currency positions. Interest rate movements in one
country as well as relative interest rate movements between
countries materially impact the Partnership's profitability. The
Partnership's primary interest rate exposure is generally to
interest rate fluctuations in the U.S. and the other G-7
countries. The G-7 countries consist of France, the U.S.,
Britain, Germany, Japan, Italy, and Canada. However, the
Partnership also takes futures positions in the government debt
of smaller nations - e.g. Australia. Demeter anticipates that G-
7 and Australian interest rates will remain the primary interest
rate exposure of the Partnership for the foreseeable future. The
speculative futures positions held by the Partnership may range
from short to long-term instruments. Consequently, changes in
short, medium or long-term interest rates may have an effect on
the Partnership.

Equity. The third largest exposure at June 30, 2002 was to
equity price risk in the G-7 countries. The stock index futures
traded by the Partnership are by law limited to futures on
broadly-based indices. At June 30, 2002, the Partnership's

primary exposures were to the NASDAQ (U.S.), S&P 500 (U.S.),
Nikkei (Japan) and Hang Seng (China) stock indices. The
Partnership is primarily exposed to the risk of adverse price
trends or static markets in the U.S and Japanese indices. Static
markets would not cause major market changes but would make it
difficult for the Partnership to avoid being "whipsawed" into
numerous small losses.

Commodity.
Energy. At June 30, 2002, the Partnership's energy exposure
was shared primarily by futures contracts in crude oil and
its related products, and natural gas. Price movements in
the energy markets result from political developments in the
Middle East, weather patterns and other economic
fundamentals. Significant profits and losses, which have
been experienced in the past, are expected to continue to be
experienced in these markets. Natural gas has exhibited
volatility in prices resulting from weather patterns and
supply and demand factors and may continue in this choppy
pattern.

Soft Commodities and Agriculturals. At June 30, 2002, the
Partnership had exposure to the markets that comprise these
sectors. Most of the exposure was to cotton, coffee, sugar,
corn and soybean markets. Supply and demand inequalities,
severe weather disruption and market expectations affect
price movements in these markets.

Metals. The Partnership's metals exposure at June 30, 2002
was to fluctuations in the price of precious metals, such as
gold and silver, and base metals, such as copper, nickel,
lead, zinc and aluminum. Economic forces, supply and demand
inequalities, geopolitical factors and market expectations
influence price movement in these markets. The Trading
Advisors, from time to time, take positions when market
opportunities develop. Demeter anticipates that the
Partnership will continue to be exposed to the precious and
base metals markets.

Qualitative Disclosures Regarding Non-Trading Risk Exposure
The following was the only non-trading risk exposure of the
Partnership at June 30, 2002:

Foreign Currency Balances. The Partnership's primary foreign
currency balances at June 30, 2002 were in Hong Kong
dollars, euros and Japanese yen. The Partnership controls
the non-trading risk of these balances by regularly
converting them back into U.S. dollars upon liquidation of
their respective positions.

Qualitative Disclosures Regarding Means of Managing Risk Exposure
The Partnership and the Trading Advisors, separately, attempt to
manage the risk of the Partnership's open positions in essentially

the same manner in all market categories traded. Demeter attempts
to manage market exposure by diversifying the Partnership's assets
among different Trading Advisors, each of whose strategies focus
on different market sectors and trading approaches, and monitoring
the performance of the Trading Advisors daily. In addition, the
Trading Advisors establish diversification guidelines, often set
in terms of the maximum margin to be committed to positions in any
one market sector or market-sensitive instrument.

Demeter monitors and controls the risk of the Partnership's non-
trading instrument, cash. Cash is the only Partnership investment
directed by Demeter, rather than the Trading Advisors.

PART II. OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS
None.

Item 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
The Partnership initially registered 60,000 Units (prior to the
100 for one Unit conversion on April 30, 1998) pursuant to a
Registration Statement on Form S-1, which became effective on May
17, 1991 (SEC File Number 33-39667), and 10,000 (pre-conversion)
Units at a supplemental closing pursuant to a new Registration
Statement on Form S-1, which became effective on August 23, 1991
(SEC File No. 33-42380). The offering commenced on May 17, 1991
and terminated as of August 31, 1991, with 60,853.334 Units sold.
The aggregate price of the offering amount registered was
$69,380,300, based upon the initial offering price of $1,000 per
Unit and $938.03 per Unit at the supplemental closing (the
initial closing and supplemental closing, hereinafter, the
"Initial Offering"). The aggregate offering price of the Units
sold during the Initial Offering was $60,268,482.

The Partnership registered an additional 75,000 Units (pre-
conversion) pursuant to a new Registration Statement of Form S-1,
which became effective on August 31, 1993 (SEC File Number 33-
65072) (the "Second Offering"). The Second Offering commenced on

August 31, 1993 and terminated as of September 30, 1993, with
74,408.337 Units sold. The aggregate price of the Second
Offering amount registered was $102,744,000, based upon an
initial offering price of $1,369.92. The aggregate price of the
Units sold during the Second Offering was $116,617,866.

The Partnership registered an additional 60,000 Units (pre-
conversion) pursuant to another Registration Statement on Form
S-1, which became effective on October 17, 1996 (SEC File Number
333-1918), (the "Third Offering"). The Third Offering commenced
on October 17, 1996 and terminated as of March 3, 1997, with
10,878.000 Units sold. The aggregate price of the Third Offering
amount registered was $98,247,000, based upon an initial offering
price of $1,637.45. The aggregate price of the Units sold during
the Third Offering was $22,308,326. Through the Third Offering
58,860.329 Units (pre-conversion) were left unsold and ultimately
de-registered.

The Partnership registered an additional 1,500,000 Units pursuant
to another Registration Statement on Form S-1, which became
effective on May 11, 1998 (SEC File Number 333-47829).

Commencing with the April 30, 1998 monthly closing, each
previously outstanding Unit was converted into 100 Units.

The Partnership registered an additional 5,000,000 Units pursuant
to another Registration Statement on Form S-1, which became
effective on January 21, 1999 (File Number 333-68773).

The Partnership registered an additional 4,500,000 Units pursuant
to another Registration Statement on Form S-1, which became
effective on February 28, 2000 (SEC File Number 333-90467).

The Partnership registered an additional 1,000,000 Units pursuant
to another Registration Statement on Form S-1, which became
effective on April 30, 2002 (SEC File Number 333-84656).

The managing underwriter for the Partnership is Morgan Stanley
DW.

Units are being sold at monthly closings at a price equal to 100%
of the net asset value of a Unit as of the last day of each
month.

Through June 30, 2002, 22,280,583.061 Units of the Partnership
were sold, leaving 4,333,384.039 Units unsold. The aggregate
price of the Units sold through June 30, 2002 is $376,393,036.

Since no expenses are chargeable against proceeds, 100% of the
proceeds of the offering have been applied to the working capital
of the Partnership for use in accordance with the "Use of
Proceeds" section of the Prospectus and the Supplement to the
Prospectus.

Item 6. EXHIBITS AND REPORTS ON FORM 8-K

(A) Exhibits

3.01 Form of Amended and Restated Limited Partnership
Agreement of the Partnership is incorporated by reference
to Exhibit A of the Partnership's Prospectus, dated April
30, 2002, filed with the Securities and Exchange
Commission pursuant to Rule 424(b)(3) under the
Securities Act of 1933, on May 8, 2002.
3.02 Certificate of Limited Partnership, dated March 19, 1991,
is incorporated by reference to Exhibit 3.02 of the
Partnership's Registration Statement on Form S-1 (File
No. 333-47829) filed with the Securities and Exchange
Commission on March 12, 1998.
3.03 Certificate of Amendment of Certificate of Limited
Partnership, dated April 6, 1999, is incorporated by
reference to Exhibit 3.03 of the Partnership's
Registration Statement on Form S-1 (File No. 333-68773)
filed with the Securities and Exchange Commission on
April 12, 1999.
3.04 Certificate of Amendment of Certificate of Limited
Partnership, dated November 1, 2001 (changing its name
from Morgan Stanley Dean Witter Spectrum Select L.P.), is
incorporated by reference to Exhibit 3.01 of the
Partnership's Form 8-K (File No. 0-19511) filed with the
Securities and Exchange Commission on November 1, 2001.
10.01 Amended and Restated Management Agreement, dated as of
June 1, 1998, among the Partnership, Demeter, and Rabar
Market Research, Inc. is incorporated by reference to
Exhibit 10.01 of the Partnership's Form 10-K (File Number
0-19511) for fiscal year ended December 31, 1998 filed on
June 30, 1999.
10.02 Amended and Restated Management Agreement, dated as of
June 1, 1998, among the Partnership, Demeter, and EMC
Capital Management, Inc. is incorporated by reference to
Exhibit 10.02 of the Partnership's Form 10-K (File Number
0-19511) for fiscal year ended December 31, 1998 filed on
June 30, 1999.
10.03 Amended and Restated Management Agreement, dated as of
June 1, 1998, among the Partnership, Demeter, and Sunrise
Capital Management, Inc. is incorporated by reference to
Exhibit 10.03 of the Partnership's Form 10-K (File Number
0-19511) for fiscal year ended December 31, 1998 filed on
June 30, 1999.

10.04 Management Agreement, dated as of May 1, 2001, among the
Partnership, Demeter, and Northfield Trading L.P., is
incorporated by reference to Exhibit 10.01 of the
Partnership's Form 8-K (File Number 0-19511) filed with
the Securities and Exchange Commission on April 25, 2001.
10.07 Form of Subscription and Exchange Agreement and Power of
Attorney to be executed by each purchaser of Units is
incorporated by reference to Exhibit B of the
Partnership's Prospectus, dated April 30, 2002, filed
with the Securities and Exchange Commission pursuant to
Rule 424(b)(3) under the Securities Act of 1933 on May 8,
2002.
10.10 Amended and Restated Escrow Agreement, dated as of March
10, 2000, among the Partnership, Morgan Stanley Spectrum
Strategic L.P., Morgan Stanley Spectrum Global Balanced
L.P., Morgan Stanley Spectrum Technical L.P., Morgan
Stanley Spectrum Currency L.P., Morgan Stanley Spectrum
Commodity L.P., Morgan Stanley DW, and The Chase
Manhattan Bank is incorporated by reference to Exhibit
10.10 of the Partnership's Registration Statement on Form
S-1 (File No. 333-90467) filed with the Securities and
Exchange Commission on November 2, 2001.
10.11 Form of Subscription Agreement Update Form to be executed
by purchasers of Units is incorporated by reference to
Exhibit C of the Partnership's Prospectus, dated April
30, 2002, filed with the Securities and Exchange
Commission pursuant to Rule 424(b)(3) under the
Securities Act of 1933 on May 8, 2002.
10.12 Amended and Restated Customer Agreement between the
Partnership and Morgan Stanley DW, dated as of October
16, 2000, is incorporated by reference to Exhibit 10.01
of the Partnership's Form 8-K (File No. 0-19511) filed
with the Securities and Exchange Commission on November
1, 2001.
10.13 Commodity Futures Customer Agreement between MS & Co. and
the Partnership, and acknowledged and agreed to by Morgan
Stanley DW, dated as of June 6, 2000, is incorporated by
reference to Exhibit 10.02 of the Partnership's Form 8-K
(File No. 0-19511) filed with the Securities and Exchange
Commission on November 1, 2001.
10.14 Customer Agreement between the Partnership and MSIL,
dated as of June 6, 2000, is incorporated by reference to
Exhibit 10.04 of the Partnership's Form 8-K (File No.
0-19511) filed with the Securities and Exchange
Commission on November 1, 2001.

10.15 Foreign Exchange and Options Master Agreement between MS
& Co. and the Partnership, dated as of April 30, 2000, is
incorporated by reference to Exhibit 10.05 of the
Partnership's Form 8-K (File No. 0-19511) filed with the
Securities and Exchange Commission on November 1, 2001.
10.16 Securities Account Control Agreement among the
Partnership, MS & Co., and Morgan Stanley DW, dated as of
May 1, 2000, is incorporated by reference to Exhibit
10.03 of the Partnership's Form 8-K (File No. 0-19511)
filed with the Securities and Exchange Commission on
November 1, 2001.
99.01 Certification of Periodic Financial Reports.

(B) Reports on Form 8-K - None.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

Morgan Stanley Spectrum Select L.P.
(Registrant)

By: Demeter Management Corporation
(General Partner)

August 13, 2002 By:/s/Raymond E. Koch
Raymond E. Koch
Chief Financial Officer

The General Partner which signed the above is the only party
authorized to act for the Registrant. The Registrant has no
principal executive officer, principal financial officer,
controller, or principal accounting officer and has no Board of
Directors.

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Morgan Stanley Spectrum
Select L.P. (the "Partnership") on Form 10-Q for the period ended
June 30, 2002, as filed with the Securities and Exchange
Commission on the date hereof (the "Report"), I, Robert E. Murray,
President, Demeter Management Corporation, general partner of the
Partnership, certify, pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002,
that:
(1) The Report fully complies with the requirements of Section
13 or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents,
in all material respects, the financial condition and
results of operations of the Partnership.

By: /s/Robert E. Murray

Name: Robert E. Murray
Date: Chairman of the Board and President

Date: August 13, 2002

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Morgan Stanley Spectrum
Select L.P. (the "Partnership") on Form 10-Q for the period ended
June 30, 2002 as filed with the Securities and Exchange Commission
on the date hereof (the "Report"), I, Raymond E. Koch, Chief
Financial Officer, Demeter Management Corporation, general partner
of the Partnership, certify, pursuant to 18 U.S.C. Section 1350,
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002, that:
(1) The Report fully complies with the requirements of Section
13 or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents,
in all material respects, the financial condition and
results of operations of the Partnership.

By: /s/Raymond E. Koch

Name: Raymond E. Koch
Title: Chief Financial Officer

Date: August 13, 2002