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What is Muhurat Trading?

As per the Hindu calendar, muhurat trading is a one-hour trade activity held on the Diwali eve. It refers to an auspicious moment when people exchange stocks for a short duration, to wish each other wealth and prosperity for the rest of the year. Such trading periods are announced by stock exchanges, a week or so before the celebration of Diwali.

Like the normal sessions of trading, muhurat trading is available for every trader and investor. It is conducted by both the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE). The investors can place orders through their brokers during this time. This phase of activity also witnesses opening of trading in derivatives, currency derivatives and stocks. Do take note however, that commodities trading is allowed during the time allotted to muhurat trade activities.

The Roots of Muhurat Trading State-wise

It has been a tradition for stockbrokers to pour in their active business for the year on Diwali and thus, they would embark on opening new settling account for their clients during the other money market occasion referred as Muhurat in Diwali Jeanette Nelson and Jacob Berg 28.

During Diwali, the brokerage community would also worship their books of accounts or perform Chopda Pujan. The custom of beautiful opening a new account in a stock trading market was dated to many beliefs.

The primary one was that this period saw the buying of stocks by Gujarati business people and financiers, but equities were sold during the period by Marwari business people and investors since they held the belief that there should not be money kept in the kubera ghar. On the contrary to earlier hold this is not the case right now, even if no proof is available.

And hence trading historically done more vivaciously given the festive season has reverted on more of a novelty practice. Immediate majority of the Hindu investors perform Lakshmi Puja and after some time go for investing into safe and sound stocks which are expected to give very good returns over a period of time.

Muhurat Trading Timing 2024

Muhurat trading calendars are prepared for both these stock markets, NSE and BSE, by their respective governing bodies. This year, Muhurat trade will also be conducted on November 1st, 2024. They have also issued communications regarding the same. The same time rule will apply for trading in securities lending and borrowing, equity future and options, currency and other derivatives.

What is Muhurat Trade?

National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) permit trading to take place on a day set aside for the rituals of Diwali for some hours. This typically includes the following components of the session:

1. Block trade session: In this case, participants agree to Buy/sell the shares at a particular price and inform the exchange about that agreement.

2. Pre-Open Session: During this phase (approximately eight minutes), the prices are determined for the respective stocks although not trading takes place.

3. The actual market hours: It is one hour trading session that takes place with great deal of trading activity.

4. Call Auction Sessions: These are called when trades of low volume securities take virtually place. Such a security is known as illiquid if it does not satisfy certain criteria set by the exchange.

5. Closing Session: where market participants, including investors and dealers, are allowed to place a market order to be filled at the closing price.

Merits of Muhurat Trading

There are many benefits when it comes to engaging in muhurat trading. First and foremost, it provides a festive, traditional, and positive start to the financial year. Since, many of the traders are buying and increasing the market volumes, this could turn out to be a bullish situation for the market. This also allows investors to realign their investments and make strategic buys owing to the positive vibes and price expectations during the session. It also turns out to be an opportunity for certain investors who believe that joining the market at this time will help them earn wealth and prosperity.

The rationale for Muhurat Trading

Given that the time span allotted for muhurat may be just one hour, the session has reputation for being very wild with price movement. Therefore, if you have an investment horizon of more than 3 years then buy high grade company shares and do not take undue risks. As most of the traders and investors are in the market buying and selling stocks, most experienced traders easilyscam the forex market.

Who Gains from Muhurat Trading?

It is also a good way of trading because of the high trading volumes and offers an opportunity to buy and sell equities within a short time. Moreover, ‘muhurat’ trading period is positive since majority of the people are in a celebratory mood associated with richness and prosperity thereby making people optimistic with the stock markets and the economies. Thus, this provides a good chance for all traders and investors, whether experienced or just starting out, to take advantage of the Muhurat trading period.

In the opinion of many which have faith with the planets’ favourite positon during celebrations, Diwali is the perfect occasion to mark the onset of new wealth and prosperity. For these reasons, it is a good idea to consider the start of purchasing shares, if you are unacquainted with it to this point – Diwali may serve well as an appropriate day for investors to consider the stretching of their frictions.

Look for well-managed companies and purchase shares that fit your investment style and tend to the long horizon.

But, in case you are planning on entering the stock market directly, then it won’t hurt to simply observe the trades done within the Mahurat Trading session and maybe even do some simulator paper trading to get the feel of things. This is because spacious slaughtering grounds within the trading session last only for one hour making the markets very volatile. It is therefore recommended to novice traders that they proceed with extreme care.

This is because the majority of investors and traders spectators majority of investors and traders would buy and/or sell stocks as a sign of recognition of the day’s auspiciousness, whereas experienced traders who day trade will take advantage of this period.

The act itself can mean more than the margins of profit attainable. A case in hand is that aggressive day traders might make significant profits just by studying the market and jumping in after the trends are established. Overall, this year has been challenging because of the recession as a result of the pandemic on businesses and people.

You would be right to be cautious about such opinions, however, even when many tons of pundits hope for a fruitful Muhurat trading session in 2024.

Importance of Muhurt Trading

Muhurat trade is more than a mere exchange of money, but rather a ritual that enhances the lives of market players. It fosters the spirit of achievement, integrity, and positivity by melding the domains of money and faith. As you get ready to participate in muhurat trading this Diwali, know that it is a time to rejoice and trade with the aim of doing well in the coming year. Good Muhurat Trading and Diwali to all!

It is widely believed among the investors that Diwali Muhurat Trading is the right time to buy shares and therefore considered as the most propitious time for the stock market. The duration of this stock session of Muhurat Trading is normally limited to about one hour, in which the traders are allowed to carry out trades symbolically in respect of the tradition of starting the financial year on a positive note without performing any meaningful economic activity.