VIX soars as traders rush for cover

New York: Fears that failures at US regional lenders including Silicon Valley Bank could portend a much bigger issue are sweeping across the globe, prompting Wall Street traders to seek shelter in the options market.

The Cboe Volatility Index, a gauge of options cost tied to the S&P 500 known as VIX, jumped Monday to briefly exceed 30 for the first time since last October, while the equity measure sank as much as 1.4% before paring.

Normally, VIX futures contracts are more expensive the further down the horizon. Now, traders are betting on more turbulence in the short term than they are three months ahead, making it more expensive to trade near-dated contracts.