By Saqib Iqbal Ahmed

NEW YORK, Sept 9 (Reuters) – With two months until the U.S. midterm elections, the options market is showing a potentially toxic mix of fragility and fearlessness, with some analysts worried markets are ill-prepared to absorb any shock.

Despite recent bond market volatility, stocks remain near record highs, volatility ‌measures are near 2026 lows, and equity market correlations are flirting with record lows, meaning stocks are moving more independently than usual.

While analysts do not expect the ‌elections themselves to prompt a big market reaction, the run-up to the November 3 vote could be volatile.

As the elections approach, investor focus could turn to the…