Oct 28 (Reuters) - Robinhood announced the

launch of U.S. presidential election event contracts on Monday,

enabling customers to trade based on their prediction for the

tightly contested race between Vice President Kamala Harris and

former President Donald Trump.

Markets will be watching the Nov. 5 contest closely and

analysts expect volatility across asset classes in the run-up to

the results.

The trading platform, popular among retail traders, said the

presidential election event contracts will start rolling out to

a limited number of users on Monday and that customers trading

in them must be citizens of the United States.

Event derivatives trading involves buying and selling

contracts that allow traders to speculate on the outcome of

specific events such as elections, economic data releases, or

policy decisions, without owning the underlying assets related

to those events.

These types of derivatives, which are relatively new and

generally considered high-risk compared to traditional financial

instruments, have gained traction in recent years.

PredictIt, a real-money prediction market platform where

users can buy and sell shares on the outcomes of future events,

has also gained significant popularity this year in the lead-up

to the election.

Robinhood introduced futures and index options trading

features to its mobile app, for a fee, earlier this month,

marking a shift from its traditional commission-free trading

model.

The company, which became synonymous with mom-and-pop

investors in 2021, is now aiming to evolve into a comprehensive

financial services provider and compete with established

brokerages catering to institutional clients.

It committed earlier this year to expanding margins and

prioritizing "profitable growth" in 2024. Investor enthusiasm

for new products and the focus on profits have fueled a

year-to-date stock increase of more than 100%.