What is Muhurat Trading? Meaning, History and Timing in 2024
24 October, 2024
Synopsis
Muhurat Trading is a period in Diwali during which the stock market is active for an hour.
The National Stock Exchange and Bombay Stock Exchange announce the Muhurat Trading timing.
This year, Muhurat Trading will take place on 1st November.
In Hindu traditions, the concept of an auspicious moment or time for undertaking significant activities holds great importance. Muhurat, derived from ancient Vedic astrology, refers to a specific window of time believed to align cosmic forces in a way that brings good fortune.
This belief in the power of Muhurat extends beyond personal milestones to financial and business decisions. During Diwali, one of the most important festivals in India, traders and investors engage in what is called "Muhurat Trading." On this auspicious day, the stock market opens for a special, symbolic hour of trading. Historically, traders have viewed this period as particularly propitious for wealth creation, seeing it as an opportunity to usher in prosperity and success for the upcoming year. As a tradition deeply rooted in faith and culture, Muhurat Trading has continued to hold significance for both seasoned investors and new entrants in the stock market.
The National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) announce the day of Muhurat Trading in their trading holidays’ section on their respective websites.
In this article, you can get information on what Muhurat Trading is, its history and Diwali Muhurat Trading timing in 2024.
History of Muhurat Trading
The Muhurat Trading tradition began a few decades ago, in 1957, at the Bombay Stock Exchange. Later, the National Stock Exchange embraced this tradition. Now, every year Diwali is associated with a Muhurat Trading session.
What Happens During Muhurat Trading?
On a specific day during Diwali, the NSE and BSE permit trading for a limited time, usually a one-hour window. Segments on which you can trade during Muhurat Trading include equity, equity derivative, Securities Lending and Borrowing (SLB), currency derivatives, commodity derivatives and Electronic Gold Receipts (EGR).
Typically, the session is divided into the following:
Block Deal Session: Here, the two parties involved in the trade agree to buy/sell a security at a fixed price and inform the stock exchange about it.
Pre-Open Session: This is when the stock exchange determines the opening market prices.
Normal Market Session: This is the one-hour session when most traders trade.
Closing Session: This is when traders and investors can place a market order at the closing price.
Muhurat Trading Timings 2024
Every year, the National Stock Exchange and the Bombay Stock Exchange announce the Muhurat Trading timing. This year, Muhurat Trading will take place on 1st November 2024, which is also the day for Diwali Laxmi Pujan. A special one-hour Trading Session is scheduled for Friday, November 1, 2024, from 6 pm to 7 pm and the pre-opens from 5.45 pm to 6 pm.
Benefits of Muhurat Trading
Muhurat Trading offers several advantages for participants.
Potentially Favourable Market Conditions: Market conditions may be favourable during Muhurat trading as many investors tend to buy shares during this day.
Portfolio Rebalancing Opportunities: Muhurat Trading also presents an opportunity for investors to rebalance their portfolios and make strategic investments. As an investor, you may take advantage of potential price fluctuations during the session.
Enhanced Market Participation: Muhurat Trading may attract new investors considering the symbolic belief associated with it.
Things to Consider for Muhurat Trading
While Muhurat Trading may enhance your equity investments, you may want to consider the following:
Market Volatility: An auspicious day does not warrant guaranteed positive market conditions. The market may show volatility on muhurat trading day too. This means that stock prices can fluctuate and there’s always a chance that the market may not work in your favour.
Avoid Impulsive Decisions: While the atmosphere may be optimistic, it’s crucial to evaluate investment or trading moves carefully.
Liquidity Concerns: You ought to be careful of potential limitations in liquidity. Since Muhurat Trading is available for only an hour, liquidity may be lower than usual market days.
FAQs
What is the benefit of Muhurat Trading?
Muhurat Trading has ceremonial and cultural significance and tends to create a positive atmosphere for investors. Many consider it auspicious to do trading & investments during muhurat hours on Diwali day.
What are the rules of Muhurat Trading?
Muhurat Trading follows the same regulations as regular trading sessions, but it is conducted within a specified one-hour window during Diwali.
Can I sell shares on Muhurat Trading?
Yes, you can. Muhurat Trading allows both the buying and selling of shares.
*Disclaimer: The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. You are recommended to obtain specific professional advice before you take any action. Investments are subject to market risks and other risks.
