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With a workforce of over 200,000 people and a current market value of US$222.85 billion (market capitalisation), Alibaba (NYSE; ticker: BABA), founded by a team led by Jack Ma in 1999, has evolved into China’s largest e-commerce platform.
The Alibaba Group is the parent company of its most recognised brand, Alibaba.com, which serves as a platform to connect manufacturers and distributors with businesses for bulk buying and selling. In addition to Alibaba.com, the Alibaba Group oversees several key business segments, including Taobao and Tmall. Taobao focusses on a customer-to-customer (C2C) approach, while Tmall targets business-to-consumer (B2C) transactions, emphasising premium products and international listings. The international e-commerce segment also features well-known brands such as AliExpress and Lazada.
Contracts for Differences (CFDs) serve as leveraged financial instruments that operate like most derivatives, permitting speculation and hedging across global markets without taking physical ownership of the underlying asset. These include Currencies (the Forex market), as well as Stock Indices, Commodities, Bonds, Exchange-Traded Funds (ETFs), and individual Stocks like Alibaba.
CFDs derive their prices from the underlying asset and are traded in the over-the-counter (OTC) market. It’s important to note that CFDs are always settled in cash, meaning that physical delivery of the underlying asset is impossible.
One of the key defining attributes of CFDs is leverage. To understand how leverage works in the CFD market, you must be familiar with how margin and leverage operate together, as one cannot function without the other. By way of an example, let’s assume you want to buy 250 shares of Alibaba, which, in this illustration, is trading at US$175 per share. Unleveraged, this would cost US$43,750 and bestow physical ownership of said shares. On the other hand, you may opt to invest in Alibaba’s stock through Share CFDs and simply trade the underlying price movement of the asset without assuming physical delivery. With FP Markets, you can invest in Alibaba with an equivalent position size of 250 shares for 20% of the initial investment value: US$8,750. In this example, using margin, essentially a ‘deposit’, you have leveraged your capital by 5:1.
1. Open an FP Markets Forex and CFD Trading Account
To begin investing in Shares CFDs, you must first open a Forex and CFD account with FP Markets. On the FP Markets main webpage, click the OPEN LIVE tab in the upper right corner and start the five-step Account Application.
2. Download your Trading Platform
Selecting the correct trading platform is important for any trader or investor. A trading platform should provide everything needed to navigate the financial markets and easily execute trading positions.
With FP Markets, you can access and download your preferred trading platforms via the Client Portal. Your login details will be sent to your email address once registered. Share CFD investors commonly use both MetaTrader 5 (MT5) and cTrader.
3. Find the BABA Ticker
The BABA stock ticker can be found through MT5’s Market Watch (Ctrl+M), which lists the active bid and ask quotes for all of the financial instruments that can be traded with FP Markets.
You can simply type ‘BABA’ at the bottom part of the Market Watch and select Alibaba’s stock to create a new row. From here, drag and drop the stock to the chart’s interface, where you can alter the chart’s preferences to accommodate your trading strategies.
4. Place the Buy or Sell Order
Although MT5’s one-click trading application (Alt+T – see image on the right below) is often employed as an option by shorter-term traders to buy and sell, many investors use the platform’s order window (F9 – see image on the left below).
Before clicking either the buy or sell button within the order window, you must enter your trading strategy’s parameters. This includes setting a protective stop-loss order, the take-profit order, the type of order needed, and the trading volume (remember, 1 CFD contract equates to 1 share).
Share CFDs: 
In the quarter ending 30 June 2024, Alibaba Group’s earnings fell short of top and bottom-line estimates. Revenue was RMB243.24 billion, versus RMB249.05 billion expected, while net income was RMB24.27 billion compared to the RMB26.91 estimate.
All in all, revenue rose 4.0% while net income fell nearly 30%; the company noted that the net income fell due to decreased income from operations and increased impairment of investments.
Toby Xu, Chief Financial Officer of Alibaba Group, commented: 'In this quarter, we continue to invest for growth in our core businesses while reducing losses in other business units through operating efficiency. We maintained the integrity of our margins and delivered consistent adjusted EBITA. We also returned significant value to shareholders at a pace higher than past quarters, as we made US$5.8 billion of share repurchases that included a concurrent repurchase of shares in connection with our convertible notes offering. This transaction underscores our confidence in our business outlook'.
China's economic stimulus measures earlier this year have positively impacted Alibaba's stock, driving an increase over the last six months. The stock broke out of sluggish momentum in mid-September after the company unveiled 100 Open-sourced Qwen 2.5 Multimodal Models and New Text-to-Video AI Model.
The September quarter 24 earnings will be released on 15 November.
According to Refinitiv data, projections show that most analysts are bullish about the BABA stock. 30% recommend a ‘strong buy’, 53% suggest a ‘buy’, and 17% recommend a ‘hold’. The stock's current mean (median) price target is US$120.21 (US$120.00).
As you can see from the daily chart of Alibaba, the stock has been largely directionless since early 2022, ranging between US$118.30 and US$68.00.
With that being said, despite most analysts suggesting a buy recommendation, sellers have been in control after stepping below support at US$102.39. Room to continue pushing lower is seen until price meets support at US$88.26, and any movement below here could have the BABA stock run for support as low as US$73.46.
Investing in physical shares of Alibaba is an alternative investment option that involves taking ownership of the shares; the investment means you essentially become a partial company owner proportionate to the number of shares purchased.
In addition to potentially being entitled to dividend payments and voting rights, the value of your investment will depend on the performance of the company’s share price.
Futures and options markets are derivatives contracts traded based on a future price and date. A futures contract is an agreement that legally obligates both the buyer and seller to commit to buying and selling the underlying asset at a predefined date and price in the future. While an options contract offers similar conditions, the buyer, in this case, has the right to buy or sell at a future date at a specified price but is not obligated to commit. In contrast, the seller of the option is contractually obligated to commit to buy/sell at a future date at a specified price.
Popularly traded underliers for futures and options are physical products such as commodities (Gold, Silver and Oil, etc), as well as financial underliers, like Bonds and Stocks.
ETFs are unique investment vehicles that are traded on a stock exchange. While actively managed ETFs or single-stock ETFs are available, the vast majority of investors favour passive ETFs whose primary goal is to as closely as possible mimic the pricing behaviour of a market index (like the S&P 500 or FTSE 100), a specific sector, industry, in addition to other widely traded asset classes, like Currencies, Bonds, and Commodities, etc.
It is important to note that the ownership of the ETF’s assets is divided into shares, which are bought and sold similar to common stocks on a stock exchange. And just like a stock, an ETF will have a unique ticker symbol, with intraday price data available during stock exchange hours.
Why investors find ETFs a popular way of investing is largely due to their diversification benefits (they can hold a wide variety of assets), low cost, and, for many, their tax efficiency.
1. Does BABA pay a dividend?
Alibaba does pay a dividend. As of writing, the company’s annual dividend yield is 2.18%.
2. What are the major differences between CFDs and physical shares?
Although CFDs and physical shares are similar in many ways, where they are traded, the leverage they are traded with and the ownership rights differentiate both investment vehicles.
CFDs are traded over the counter (off-exchange), while physical shares trade on a formal stock exchange, such as the New York Stock Exchange (NYSE). The leverage CFDs can be traded with is far greater than is available with physical shares. With CFDs, you do not take physical ownership of the underlying shares as they are derivative products. However, with physical shares, partial ownership is granted in proportion to the number of shares purchased.
3. Can I trade BABA on MT5?
With FP Markets, BABA can be traded on both MT5 and cTrader.
4. What are the trading hours for BABA?
The trading hours for BABA are between 16:30 and 23:00 GMT+2 (Monday-Friday).
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