What Is Muhurat Trading
04 October, 2023
Ever heard about Muhurat trading or Muhurat trading time and wondered what it's all about? Then you've come to the right place.
In this blog, we will delve into the fascinating world of Muhurat trading, exploring its history, significance, and how it has become an integral part of India's financial landscape.
Muhurat trading is a unique and auspicious tradition in the Indian stock market. It holds great significance for investors and traders alike. So, let's get started and unlock the journey of Muhurat trading together.
What is Muhurat trading?
"Muhurat" is a term used in Hindu customs to refer to an auspicious time when planetary alignments are believed to bring positive outcomes. Among traders, Muhurat trading is a customary practice observed during Diwali. It is a one-hour trading session designated by the stock exchange on Diwali when investing in shares is considered highly favourable.
The stock exchange designates this specific time for Muhurat trading each year. The belief behind this tradition is that engaging in trading during this auspicious hour enhances the likelihood of accumulating wealth and prosperity. It is believed that investing or trading on this day will yield good returns. This unique custom revolves around individuals purchasing stocks as a symbolic representation of Goddess Lakshmi, the deity associated with wealth and prosperity.
Muhurat trading history
In India, business owners and stock brokers start their new year on Diwali, the festival of lights. They open new accounts for the upcoming fiscal year, symbolising a fresh financial beginning. They perform the Chopda Pujan, a ritual to worship their books of accounts. Diwali is also a time to honour Goddess Lakshmi, the embodiment of wealth and prosperity.
The practice of Muhurat trading has a history spanning more than six decades. It originated at the Bombay Stock Exchange (BSE) in 1957 and was subsequently adopted by the National Stock Exchange (NSE) in 1992.
During this auspicious occasion, many Hindu investors perform Lakshmi Pujan, a prayer to Goddess Lakshmi, before purchasing shares. While Muhurat trading does not guarantee profits, it is believed to have a positive impact on one's wealth throughout the year. Over time, the BSE Sensex has often lived up to investors' expectations on this special day, leading to a sense of optimism among participants.
The proceedings of Muhurat trading
During Muhurat trading, which deviates from the regular weekday market schedule operating from 9.15 am to 3.30 pm, a special one-hour trading window opens at a predetermined time.
Session | Description |
Block deal session | In this session, two parties agree to buy or sell shares at a predetermined price and inform the respective stock exchanges to execute the deal. |
Pre-open session | Lasting approximately eight minutes, this session determines the equilibrium price set by the stock exchanges. |
Normal market session | During this hour-long session, actual trading takes place, allowing investors to purchase shares from a range of available companies. |
Call auction session | This segment involves trading illiquid securities, which meet specific criteria set by the stock exchanges. |
Closing session | This is the final part of Muhurat trading, during which investors can place orders at the closing price. |
Muhurat trading time 2023
The Muhurat trading for this year will commence on Sunday, November 12, 2023, between 6.15 pm and 7.15 pm (Diwali – Laxmi Pujan). If you are curious about the Muhurat trading time today, it is scheduled as follows -
Block deal session | 5.45 pm to 6.00 pm |
Pre-open session | 6.00 pm to 6.15 pm |
Muhurat trading session | 6.15 pm to 7.15 pm |
Call auction session | 6.20 pm to 7.05 pm |
Closing session | 7.15 pm to 7.25 pm |
Note: The precise schedule for Muhurat trading is typically disclosed by the stock exchanges a few days before Diwali. The mentioned timings serve as an illustration and could vary from one year to another.
Who can take advantage of Muhurat trading?
In India, the tradition of Diwali Muhurat trading sessions has a deep-rooted history. According to Hindu tradition, specific actions must be undertaken at auspicious times, and this belief has been ingrained for thousands of years. Following astrological recommendations, Hindus believe in conducting certain activities at precise moments.
Diwali, known for its auspicious connections, offers a special time to explore the stock market. It's a special time when people believe in positive cosmic vibes. If you're curious about stocks, Diwali could be your starting point. Look for good companies, think long-term, and maybe try paper trading to get a feel.
During Muhurat trading, the market sees high activity and a positive outlook. This makes it a valuable opportunity for both beginners and experienced traders. However, it is crucial to be attentive due to the short, intense trading period.
The day's excitement can influence market dynamics, potentially creating openings for day traders. But remember, the path to profits can be intricate and needs careful navigation.
Key considerations for Muhurat trading
Date and time: Muhurat trading will take place on November 12, 2023, at 6.15 pm. (the same might vary)
Volatility: The market can be highly volatile and unpredictable during this time due to increased trading activity.
Smart day trading: Monitor support and resistance levels for informed decisions.
Settlement: Open positions at the session's end become commitments.
Basics matter: Know a company's fundamentals before investing.
Exercise caution: Be wary of unsolicited advice from various sources.
No guarantees: Remember, investments during this session don't ensure returns.
Conclusion
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*Terms and conditions apply. This is an information communication from HDFC Bank and should not be considered as a suggestion for investment. Investments in securities market are subject to market risks, read all the related documents carefully before investing.
