NEW YORK (TheStreet) --Tuesday, November 8 is election day, when the citizens of the U.S. will cast ballots for the candidate they feel is most suited to lead this country. However, tomorrow's results not only elect a new president, but also have ramifications on the markets and investors.
Tradinganalysis.com founder Todd Gordon shared his election day investor's playbook, should Donald Trump (R) become the country's next president.
"The way I'm positioning a potential Trump win is a short in the Mexican ETF, the EWW," Gordon said on CNBC's "Squawk Box" Monday morning.
He explained his reason for doing so as not taking an outright short position.
"I'm short very expensive calls. Implied volatility in the Mexican ETF is the highest it's been in five years, so I'm short that volatility. Combined with a bearish outlook, which is selling calls," Gordon explained.
As implied volatility increases, puts and calls become more expensive, he noted. "Expressing that bearish bias, I'm selling the calls, which creates a bearish trade and also shorting expensive volatility."
Furthermore, Gordon believes that a Trump victory will result in the Dodd-Frank Act, federal regulations affecting financial institutions, coming apart. Gordon also believes that regardless of who the winner is, Trump or Hillary Clinton (D), the U.S. Federal Reserve will hike interest rates "to prove their autonomy following this beating that they've taken."