(Bloomberg) -- Volatility traders are rushing to bet on turmoil in the U.S. stock market as fears over a new strain of the coronavirus look set to finally end weeks of tranquil trading.
The Cboe Volatility Index, or VIX, jumped as much as 9 points on Friday morning, the biggest intraday move since February, according to data compiled by Bloomberg. It was 7.7 points higher at 26.3 as of 5:40 a.m. in New York, the highest level in more than six months on a closing basis.
Exchange-traded products tied to the index led ETF gains in early trading.
The index, often referred to as Wall Street’s “fear gauge,” measures the implied volatility of the S&P 500 over the next month. Futures for America’s equity benchmark slumped 1.8% on Friday amid a global pullback sparked by a new Covid strain emerging in southern Africa.
If that move holds, it would be the first drop of more than 1% for the S&P 500 since the start of October, and the biggest decline in almost two months. The gauge has enjoyed a relatively calm few weeks as traders focus on monetary policy and the pace of growth, rather than the virus.
Read more: Nervy Week for Markets Ends With Wild Swings on New Covid Strain
The VIX move looks set to ripple through the volatility complex. In pre-market trading, the $1 billion ProShares Ultra VIX Short-Term Futures ETF (ticker UVXY), which delivers 1.5 times the performance of the VIX, surged 19%. The $1.1 billion iPath Series B S&P 500 VIX Short-Term Futures ETN (VXX), a non-leveraged product, jumped 13%.
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