Wall Street's fear gauge is warning that the upcoming election could trigger a prolonged period of stock-market chaos — one that's much worse than the aftermath of 2016

"The November expiration currently has the highest volatility priced in and then there is a mild drop," said Shankar Narayanan, the head of research at Quantitative Brokers, in a recent note that included the above chart.

He added, "It seems like some market participants are expecting the equity markets to rise after the elections. However, the options term structure is also pricing a longer road to normalcy. We will have better color in a week or so."