Alibaba's rise is punishing traders that have been bold enough to short the high-flying stock. As Benzinga reported last week, short sellers in Alibaba are now down $2 billion this year. 

“Alibaba has more than twice the short interest of any other stock in the market, according to financial analytics firm S3 Partners,” Benzinga reported.

Good News For ETFs

Predictably, Alibaba's surge is benefiting an array of exchange-traded funds. While some of the most popular diversified emerging markets ETFs feature exposure to Alibaba and other familiar Chinese Internet stocks, those funds do so with often nominal weights. Conversely, investors can find significant Alibaba exposure in more focused ETFs.

About That Weight

Not surprisingly, CQQQ's Alibaba allocation is paying off as the ETF is up about 55 percent year to date. Additionally, CQQQ was one of just six ETFs to hit an all-time high on Monday.

Investors are starting to appreciate CQQQ. The ETF turns in eight in December and has been much of its more than seven years on the market toiling in relative anonymity. That is changing this year as CQQQ has added nearly $81 million of its $160.7 million in assets under management since the start of 2017.

Over the past three years, CQQQ is up 43 percent compared to gain of around 9 percent for the largest U.S.-listed China ETF.