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UPDATE 1-Fidelity restricts clients from buying 'fear gauge' ETF

(Adds details on ETF)

BOSTON/NEW YORK, Feb 9 (Reuters) - Fidelity Investments on Friday told clients they could not buy shares in an exchange-traded fund that bets on the direction of Wall Street's "fear gauge," after the product was sideswiped by a selloff in stocks and lost 90 percent of its value this week.

The company placed restrictions on investor purchases of ProShares Short VIX Short-Term Futures ETF, the latest investment product profiting from market calm to fall victim to the recent upsurge in volatility.

"This security is restricted from online opening trades or restricted to closing trades only," said an alert on Fidelity's popular online brokerage.

Fund manager ProShare Advisors LLC was not immediately available for comment.

In recent years investors piled into options, futures, swaps and exchange-traded products that bet on low or falling volatility, in some cases earning triple-digit annual returns as markets trended higher.

Credit Suisse said on Tuesday it would terminate the second-largest publicly traded product betting on future swings in the S&P 500 after its value plunged during the global market rout. That product is a rival of SVXY, which is not closing.

The once-$800 million LJM Preservation and Growth Fund that relied heavily on a similar strategy lost more than 80 percent of its value in recent market turmoil, and this week closed its doors to new investment.

(Reporting By Tim McLaughlin and Trevor Hunnicutt; Editing by Chizu Nomiyama and Andrew Hay)