(BABX) GraniteShares 1.75x Long - Ratings and Ratios

The GraniteShares 1.75x Long BABA Daily ETF (NASDAQ:BABX) is a leveraged equity exchange-traded fund designed to provide 1.75 times the daily return of Alibaba Group Holding Limited (BABA). The fund achieves this exposure through swap agreements with major financial institutions, which allow it to replicate the targeted leverage without directly holding the underlying stock. These agreements can span from a day to over a year, enabling the fund to maintain its leveraged position. As a non-diversified fund, it concentrates its exposure on the performance of BABA, which increases potential returns but also amplifies risk.

From a structural standpoint, the fund operates by entering into total return swap agreements. These contracts obligate the fund and its counterparties to exchange the returns (or differences in returns) of BABA over the agreed term. This synthetic approach allows the fund to deliver leveraged exposure without the need for physical ownership of the underlying shares. However, this method introduces counterparty risk, as the funds performance is dependent on the financial health and stability of its swap providers.

The funds technical profile indicates moderate trading activity, with an average 20-day volume of 1,878,408 shares. Its current price of $35.26 is above its 20-day moving average of $32.61, suggesting recent upward momentum. However, the 50-day moving average of $23.18 and the 200-day moving average of $19.39 reflect a longer-term upward trend. The Average True Range (ATR) of 2.26 highlights moderate volatility, with price fluctuations expected to remain within a defined range in the near term.

From a fundamental perspective, the funds assets under management (AUM) of $133.74 million reflect a modest but significant pool of capital, indicating investor interest in leveraged exposure to BABA. This size allows for reasonable liquidity, though the funds trading volumes and spreads should be monitored for efficiency. The non-diversified nature of the fund means it is inherently more volatile and sensitive to the price movements of BABA compared to diversified ETFs.

3-Month Forecast: Based on the current technical and fundamental data, BABX is expected to trade within a range of $30 to $40 over the next three months. The funds 20-day moving average of $32.61 and 50-day moving average of $23.18 suggest upward momentum, while the ATR of 2.26 indicates potential price swings of approximately 6-8% per month. The AUM of $133.74 million provides moderate liquidity, but the funds leveraged nature and reliance on swap agreements introduce counterparty and volatility risks that could impact performance.