Highlights

1. The GraniteShares 2x Long BABA Daily ETF (BABX) surged an astonishing 25.54% on Friday, closing at $33.52.
2. The rally occurred on exceptionally high trading volume, nearly six times the 65-day average, signaling strong investor interest.
3. This explosive gain starkly contrasted with a broader market downturn, as the DJIA, S&P 500, and Nasdaq all ended the day in negative territory.
4. The week started with modest declines for the leveraged ETF before the dramatic reversal at the week’s end.

Did a Volatility Shock Just Signal a New Trajectory for Alibaba Bulls?

The GraniteShares 2x Long BABA Daily ETF (BABX), a fund designed to deliver twice the daily return of Alibaba Group Holding Ltd. stock, concluded the week with a spectacular rally that defied a broader market retreat. After a week of tepid performance, the ETF exploded by over 25% in a single session on Friday, August 29, 2025. This move, backed by a massive surge in trading volume, has left investors and market analysts questioning whether this is a temporary speculative frenzy or the beginning of a sustained upward trend for the beleaguered Chinese tech giant’s stock.

Navigating a Mid-Week Slump

The week began on a quiet note for BABX. On Monday, August 25th, the ETF closed at $28.89, having traded within a relatively tight range. The following sessions saw a gradual erosion of value, with the price dipping to a closing low for the week of $26.70 on Thursday. This downtrend reflected a lack of immediate positive catalysts for Alibaba’s underlying stock and a cautious sentiment among traders. The daily volumes hovered closer to their typical averages, suggesting the market was in a holding pattern, waiting for a definitive signal. The price action was indicative of the typical volatility associated with leveraged financial instruments, where minor dips in the underlying asset are magnified.

A Friday Surge Changes the Narrative

The market dynamic shifted dramatically on Friday. BABX opened at $30.83, significantly higher than the previous day’s close, and never looked back. The ETF soared to an intraday high of $34.25 before closing at $33.52, marking a 25.54% gain. This stunning performance was driven by an extraordinary volume of 6.3 million shares, dwarfing the 65-day average volume of just over 1 million. Such a spike in activity points to a significant institutional or retail investor event that reignited bullish conviction in Alibaba. The rally was even more noteworthy given the negative performance of major U.S. indices, underscoring that the catalyst was specific to Alibaba rather than a reflection of general market optimism. This divergence highlights the high-risk, high-reward nature of single-stock leveraged ETFs, which can deliver outsized returns even when the broader market is faltering.

Looking Ahead: A Test of Conviction

The pivotal question for traders moving forward is whether Friday’s momentum can be sustained. This rally has pushed BABX firmly off its recent lows, but it remains well below its 52-week high of $45.28. Investors will be closely watching for follow-through buying and any fundamental news from Alibaba that could justify the renewed optimism. While the surge offers a significant boost to bullish sentiment, the inherent leverage of BABX means any reversal in Alibaba’s stock will be equally punishing. The path ahead will likely be volatile, and traders should monitor key technical levels and news flow from China’s regulatory and economic landscape to gauge whether this powerful rally is a new beginning or merely a fleeting chapter.