An in-stack bias is provided for stabilizing the free layer of a ballistic magneto resistive (BMR) sensor. In-stack bias includes a decoupling layer that is a spacer between the free layer and a ferromagnetic stabilizer layer of the in-stack bias, and an anti-ferromagnetic layer positioned above the ferromagnetic layer. The spacer is a nano-contact layer having magnetic particles positioned in a non-magnetic matrix. The free layer may be single layer, composed or synthetic, and the in-stack bias may be laterally bounded by the sidewalls, or alternatively, extend above the sidewalls and spacer. Additionally, a hard bias may also be provided. The spacer of the in-stack bias results in the reduction of the exchange coupling between the free layer and ferromagnetic stabilizing layer, an improved A.DELTA.R due to confinement of current flow through a smaller area, and increased MR due to the domain wall created within the magnetic nano-contact.