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Call it the Alibaba Effect.

Alibaba Group Holding’s successful initial public offering is making U.S. investors increasingly comfortable owning Chinese stocks. This may bode poorly for – or force change at – the many exchange-traded funds that track China but whose portfolio inclusion rules omit Alibaba.

Investors who believe FXI’s stock inclusion methodology will be changed to include Alibaba – and more than one index shop is considering such a move – are advised to initiate a “risk reversal” strategy on the exchange-traded fund.

With FXI around $39, investors can sell FXI’s February $35 put, recently bid at 33 cents, and buy the February $40 call at $1.69. The position costs $1.36.

If FXI ranges between the options strike prices, investors will lose money. The ideal outcome is that FXI rallies above the call strike price, or dips just below the put strike price and then advances.

Timing Alibaba’s inclusion in FXI is difficult. We spoke to a senior executive at a major index and ETF company who expects rule changes at some providers, but it is hard to know when that may happen.

The risk-reversal strategy expresses a view that fund providers will change inclusion rules to add Alibaba and other Chinese stocks with similar listings structures. If the ETF providers do not evolve, they risk losing investors.

Until Alibaba’s IPO, FXI was the primary way many investors participated in China’s stock market. But FXI has barely budged this year. It closed at $37.12 on Jan. 2 and recently traded at $39.26.

Meanwhile, Alibaba’s stock has surged since its September stock offering. The IPO priced at $68 a share, and recently traded around $115. Most investors, however, bought the stock around $88 to $90, near where the stock opened for trading.

FXI’s lack of movement suggests FXI no longer reflects the dynamics of China’s economy. Traders, in fact, discuss FXI as a bet on China’s sclerotic banking and housing sectors. While the fund actually reflects a broader swath of the economy, that perception can become reality in the markets.

Alibaba’s eventual inclusion in FXI seems inevitable. But it is actually a thorny issue related to corporate structure. Alibaba’s insiders, including Ma, appoint the majority of the board .

This structure, technically known as “weighted voting right,” rendered Alibaba ineligible for listing on the Hong Kong Exchanges and Clearing Ltd. (0388.HK). The Asian market currently follows a one share, one vote rule. This reflects a view that companies and securities exchanges exist to help the country’s economy grow and prosper.

If the exchange were to change the rules, allowing Alibaba to dual list in Hong Kong, FXI should pop higher on the news. Alibaba would probably be the top FXI stock, and that would solidify gains.

The Hong Kong exchange is no doubt upset that it missed the opportunity to list Alibaba. The exchange missed valuable IPO fees and the honor of introducing Alibaba to the global market.

While it is essentially impossible to predict the pace of change in a foreign nation, especially one as shrouded as China, a more liberal view of markets appears to be in the nation’s future. China’s government recently allowed foreign investors direct access to Shanghai-listed stocks. This can be viewed as one in a series of steps to integrate China into the world’s securities markets.

Adding Alibaba to FXI would supercharge the moribund ETF’s returns and attract new investors.