While Nvidia Corp.'s upcoming earnings and Federal Reserve Chairman Kevin Warsh's speech in Jackson Hole dominate investor attention this week, equity derivatives traders are already bracing for potential volatility around the US midterm elections in November. Volatility traders monitoring futures tied to the Cboe Volatility Index, or VIX, are noting signs of increased demand to hedge S&P 500 swings during the election period. VIX futures expiring in September are trading around 17.4, but jump to 19 for October and 19.7 for November, creating a distinct "bump" in the term structure.

This pricing action at the Cboe Global Markets exchange in Chicago suggests market participants are pricing in higher uncertainty for the fourth quarter, specifically surrounding the political event.