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How to trade the midterm elections: Pros

Trader: Buying puts on XLV should prove profitable

With late polls predicting Republicans will gain control of the Senate in Tuesday's midterm elections, traders were looking to position themselves in sectors they think may benefit from a change in leadership.

For Jim Iuorio, managing director of TJM Institutional Services, a GOP victory coupled with low oil prices is a win for airline stocks.

"If Republicans do have a resounding win today, I think the … domestic supply issue just increases," he said in an interview with CNBC's "Power Lunch."

"I've been long Southwest. If it has a decent close today I may add that."

Read MoreMarket predicting not just a GOP win, but a 'wave'

Travelers receive boarding passes at the Southwest Airlines check-in counter at Ronald Reagan National Airport in Washington.
Andrew Harrer | Bloomberg | Getty Images

KKM Financial Founder and CEO Jeff Kilburg is eyeing health care, specifically the exchange-traded fund that tracks the sector, the XLV.

He said the XLV, up 21 percent year-to-date, could be hit if a Republican majority tries to repeal the Affordable Care Act.

"Buying puts on the XLV should prove profitable because health care has to come back down. Gravity will pull it lower," Kilburg said.

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However, Iuorio cautioned that the sector could be caught in the updraft of a market rally.

"The overall stock market might be relatively buoyant just for by fact that people will believe this is a more business-friendly government than we had a day ago," he said.

Who ultimately controls the Senate comes down to 10 key states, where races are close. If election night ends in no clear victor in any of those states and perhaps a run-off election, then Kilberg thinks things could get ugly.

"It could paralyze the market," he said.

Read MoreHere's why the GOP could win big in this election

If that happens, he'd buy CBOE Volatility Index (VIX) futures for protection.

Iuorio isn't convinced the market will react so harshly.

"I think it could but I look at the past six months and there've been plenty of things that I would have ranked higher on the list of what could roil markets and destabilize things than this," he explained.