What can markets expect when Alibaba (BABA)starts trading?

This is the biggest question on trading desks for the past several days. I don't make predictions on where stocks will trade, but there are several reasons I am optimistic that Alibaba-at whatever price-will open to the upside and stay there on its first day. Here are a few reasons why, put simply:

1. It's almost impossible to get the kind of numbers Alibaba has, anywhere. On all levels that matter: scale, growth, and margins, Alibaba is off the charts. It owns 80 percent of the Chinese e-commerce market, has seen 46 percent revenue growth in the most recent quarter, and has meaty margins of 54 percent.

These are stunning numbers, which almost no one has (Facebook (FB)has numbers close to it, and perhaps Google (GOOGL)used to have it). But no one else.

And the growth is continuing: the e-commerce market is projected to grow 30 percent or more a year. If Alibaba is a direct proxy for this, and it sure seems to be, where else can you get that type of growth?

Is Alibaba fairly valued? I won't get into the issue of its offshore corporate structure that gives no voting rights to shareholders. However, this is an issue for long-term holders.

I also don't want to get into valuation debates. Wedbush recently initiated coverage with an $80 price target, based on 26 times forward (2016) earnings. That does not seem like an unreasonable multiple given the growth. Facebook, by comparison, is north of 35.

One fact that has been demonstrated over and over again about this market is that investors will pay up big for growth. Alibaba has that, in spades.

2. Alibaba is a pure play on the most coveted part of the Chinese market: the consumer.

This is not a play on commodities, an old-school investment thesis in China. The "new play" has been to invest in the Chinese consumer, and this is the most direct play you can have. E-commerce is a massive sector with huge tailwinds for growth. The key point is that China's whole retail market is leapfrogging brick and mortar consumer names. Think about this: in the U.S., for more than a century there was a huge build out of store infrastructure.

3) the Asian investor may be a very significant factor in initial trading. This is a huge brand name in China. Many have relationships with Chinese brokerage firms that have access to the U.S. market. No one knows how big the Chinese orders will be, but many feel that millions of Chinese will put in market orders before they go to bed Thursday night.

There is also an as yet undetermined amount of Asia-based investment money parked in U.S. retail brokerages. My guess it that many of those will be buy and hold types, for the most part.

Is there anything that might temper a huge pop? Yes, and here's why:

1. While Alibaba is selling 320 million shares , there is an additional tranche that will become available (largely stock from former employees) that will not subject to the standard lockup. It's a big number: 128 million shares could theoretically be sold from day one. This is significant, because the average insider owns Alibaba at $2.82. At that price, many investors would not worry much if the stock was trading at $68 or $72 or higher; they will just sell.

2. At least initially, Alibaba will not be included in most indices . For example, it won't go into any Standard & Poor (S&P) indices because it is a Cayman Island based company. And it's a problem for most exchange-traded funds (ETFs). Almost all ETFs are tied to two indexing companies: MSCI and FTSE. Neither will have Alibaba in their indices, at least for the moment.

For example, MSCI will not include Alibaba in any of its indices because their rules do not allow it to buy a stock if it is based in one country and its shares are listed in a different country. Alibaba is based in China but trades only in New York (MSCI is considering changing these rules).

Other China-based companies that trade in the U.S., like Baidu (BIDU), Weibo (WB), and JD.com (JD) also are not included in these indices. This is a problem, because potentially billions of dollars could have been bought had they been included.

There is a small group of ETFs that would allow the stock to be included in the index because they allow inclusion of shares based in one country and listed in another. The list includes the SPDR S&P China ETF (NYSE Arca: GXC), the PowerShares Golden Dragon China ETF (NYSE Arca: PGJ), and the Kraneshares China Internet Index (KWEB). These, however, are still relatively small: The GXC is by far the largest, with $900 million in assets. The KWEB has only $100 million.

By contrast, the Vanguard Emerging Markets ETF (NYSE Arca: VWO), indexed to the FTSE Emerging Market Index (NYSE Arca: VWO) and will not include Alibaba, has $49 billion in assets. It will also go into the Renaissance Capital IPO ETF (IPO).

Is there life after Alibaba on the IPO calendar? Maybe. Whatever the case, don't buy into the argument that Alibaba is a "test" for the health of the IPO market.

Next week, however, will be a big test for the IPO market, with ten offerings scheduled. These include:

1. Rhode Island based regional bank Citizens Financial, a spinoff' of Royal Bank of Scotland (London Stock Exchange: RBS-GB);

2. Grupo Aval (AVAL), Colombia's largest bank;

3. Two oil & gas plays: CONE Midstream Partners (CNNX) and Vantage Energy (VEI);

4. Travelport Worldwide (TVPT), a travel e-commerce company that owns a big stake in Orbitz (OWW);

5. Atento (ATTO), a Luxembourg-based company controlled by Bain that runs call centers and other customer outreach platforms; and

6. Smart & Final Store, a high-end food retailer ($175 million).

If these price within their ranges and trade well, then we can say that the IPO market is hot. They are large deals as well, with the average IPO floating anywhere between $100 and $200 million:

Citizens Financial $3.3 billion

Grupo Aval (AVAL) $1.1 billion

Vantage Energy $600 million

VWR Corp. $600 million

Travelport Worldwide $450 million

Atento $300 million

Smart & Final Stores $175 million

Altogether, we are talking about roughly $7.5 billion in fresh stock coming to market. That's not nearly as much as Alibaba's $20 billion deal, but it is a huge amount to collectively dump on the market just a few days after one of the biggest IPOs of all time.

--By CNBC's Bob Pisani