Potential midterm-election chaos can roil markets. Here’s one trader’s play.

Investors are increasingly weighing the possibility that the outcome of the U.S. midterm elections could be contested, a scenario that would inject a fresh wave of uncertainty into markets. For trader Kevin Muir, the hedge is straightforward: buying portfolio insurance to guard against a decline. He describes this move as a “chip shot,” implying that the risk-reward is so one-sided that protecting a portfolio is an obvious step rather than a speculative bet.

The market relevance lies in how disputed election results can delay policy clarity and fuel volatility, prompting investors to reassess risk. Purchasing protective options or similar instruments does not forecast a specific outcome; it simply acknowledges that tail risks—however unlikely—merit a defensive posture.

Looking ahead, the key watchpoint is how quickly a clear winner emerges. Any signs of prolonged legal battles or recounts could lift volatility indices and pressure equities. Conversely, a decisive result might render such hedges unnecessary, though traders may still watch how markets absorb the post-election political landscape. The broader lesson: elections can be as much about process as policy.