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Muhurat Trading 2024: Everything Smart Traders Should Know

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It’s that time of the year again. Yes, the time of Diwali which the investor community keenly waits for. Diwali is an auspicious time as per the Hindu calendar and the customary Muhurat trading is being followed by investors and trading for many years. So, what exactly is Muhurat trading?
 

Before we dive into the concept, let’s first break up the two words and look at the term Muhurat.
 

The word Muhurat, is a Hindu measurement of “time”. According to Hindu customs, this time is considered auspicious for a new beginning as its when the planets are aligned in a way that would yield good returns.
 

According to the Hindu calendar, the new year starts on Diwali for many households in India. Therefore, Muhurat trading signifies that any sort of investing or trading at that time will give positive results. Even though the Indian Stock Exchanges remain closed on this day, it remains open for an hour (known as the trading window) during the day for traders to invest in shares or place their trades at this auspicious time. This period is usually in the evening of Diwali. In India, Muhurat trading will take place on Friday, November 1, 2024, from 6:15 PM to 7:15 PM.

What is Muhurat Trading?    

Muhurat Trading refers to the special, one-hour trading session conducted on the occasion of Diwali, considered an auspicious time in Hindu culture. The term 'Muhurat' signifies a favorable or lucky moment when planetary positions are aligned positively for success. For traders and investors in India, this unique session holds religious and cultural importance as it is believed to bring wealth and prosperity throughout the year. The time for Muhurat Trading is announced by stock exchanges like NSE and BSE and typically takes place in the evening on Diwali. During this period, many traders make symbolic purchases of stocks as a gesture to honor Goddess Lakshmi, the deity of wealth. Muhurat Trading is an annual tradition exclusive to the Indian stock markets.

History of Muhurat Trading

The new year starts on the day of Diwali for the trading and business communities in India. Traditional stockbrokers would open new settlement accounts for their clients and close the previous year’s balance sheet on this auspicious time, which is the Muhurat. The broking community also performs the ChopdaPujan in which they worship their books of accounts. They pray to Goddess Lakshmi for wealth, prosperity, and success on this day.

The tradition of Muhurat trading was initiated by the Bombay Stock Exchange in the year 1957.

1992 onwards the National Stock Exchange conducts it on Diwali. Nowadays, it’s become a norm for individual traders to trade on this special occasion.

What occurs at the time of Muhurat Trading?

The respective stock exchanges, BSE & NSE permit trading for a limited time period on Diwali. Unlike the other weekdays, the Muhurat trading window is open only for an hour at a pre-decided time. This session is typically divided into the following two parts.
 

Block Deal Session

In this case, two parties (Buyers & Sellers) agree to buy or sell a security at a fixed price and inform the stock exchange about the same.
 

Pre Open Session

Here, the stock exchange determines the equilibrium price which lasts for eight minutes. It’s the actual one-hour trading session which is similar to the regular market sessions
 

Call Auction Session

In this session, illiquid securities are traded. Securities are termed “illiquid” once they satisfy the criteria set by the stock exchange.
 

Closing Session

Here, investors and traders can place ma arket order at the closing price.

Muhurat Trading Timings 2024

The Muhurat trading timings are specified by the leading stock exchanges namely, the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). This year Muhurat trading will be conducted on November 1st, 2024. They also have issued circulars regarding the same. Trading in the commodity, currency, derivative segment, Equity Futures and Options , and Securities Lending and Borrowing Segment will take place in the same time slot.

EventTime
Pre – open Session6:00 PM – 6:08 PM IST
Muhurat Trading6:15 PM – 7:15 PM IST
Post – Close Session7:30 PM – 7:38 PM IST
Market Close7:40 PM IST

Who Benefits from Muhurat Trading?

Diwali is an important time of the year for all sizes of businesses; hence all eyes are on the market trends, especially at this time of the year. It is considered a good time to buy or sell stocks for those who believe in planetary alignments. Also, the trade volumes are high, and the market, bullish, riding on the festive fervor making people optimistic about the stock markets and the economy.
 

Since Diwali brings wealth and prosperity, it’s a good day to start investing in stocks if you haven’t already. However, a word of caution. If you are new to the world of trading and have never invested before, it maybe wise to just watch the market at the time of Muhurat trading and perhaps make a paper trade for getting a hang of it.
 

The markets are known to be very volatile during the Muhurat trading session, as the muhurat time is only for an hour. Hence, be very watchful, and make investments in stocks of high-quality companies if you have a long-term investment plan. Experienced traders benefit from this as mostly traders and investors engage in active buying and selling of stocks to honor the day’s auspiciousness.
 

Experts are hoping that the 2024 Muhurat trading session will turn out well as the year in general has proven to be bad for the economy due to the impact of the pandemic on both business and livelihood. Still, no harm in being vigilant and making trading decisions, using your head.

Things to keep in Mind Before Indulging in Muhurat Trading

However auspicious Muhurat trading maybe, it doesn’t imply that you can put your money in any stock in the hope of making profits. There are a few aspects that you must consider before you start buying and selling stocks during this Diwali day trading time. Let’s take a look.
 

  • Muhurat trading session for the year 2024 will happen on November 1st.
  • This time of the year is considered to befavourable by most traders and investors. Hence, a lot of them will be sitting in front of their trading screens.
  • All open positions at the end of the Muhurat trading session will result in settlement commitment.
  • It’s imperative for traders to keep an eye on resistance and support levels. Historically, the markets have proven to be volatile during Muhurat trading sessions. Thus, as a day trader, it would serve you well if you kept your resistance and support levels in focus in order to take better trading decisions.
  • If you wish to take advantage of the market volatility during the Muhurat trading session, then ensure that you choose stocks with good trading volumes as the trading window lasts for an hour only.

Disclaimer: Investments in the securities market are subject to market risk, read all related documents carefully before investing.

This content is for educational purposes only. Securities quoted are exemplary and not recommendatory.

For All Disclaimers Click Here: https://bit.ly/3Tcsfuc

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Frequently Asked Questions

What is Muhurat trading time in the stock market?

Answer Field

Muhurat trading time is a special one-hour trading session held on Diwali, considered an auspicious time for investing in the stock market. The time is set by exchanges like NSE and BSE and typically takes place in the evening.

When does Muhurat trading day usually occur?

Answer Field

Muhurat trading day occurs every year on the day of Diwali, a significant festival in India. The exact date depends on the Hindu calendar, but it generally falls between October and November.

How is Muhurat trading time determined each year?

Answer Field

The time for Muhurat trading is determined annually by stock exchanges like NSE and BSE, based on auspicious timings for Diwali. These timings are aligned with Hindu traditions that favor wealth and prosperity.

What are the typical trading hours for Muhurat trading?

Answer Field

Typically, Muhurat trading lasts for one hour during the evening on Diwali day. Exact hours are announced in advance by the stock exchanges, usually between 5:30 PM to 6:30 PM.

Can I place normal orders during Muhurat trading time?

Answer Field

Yes, you can place normal buy and sell orders during Muhurat trading time, just as you would during regular stock market sessions. It follows the same process as regular trading hours.

Is there a difference between regular trading and Muhurat trading?

Answer Field

The main difference is that Muhurat trading is held for only one hour and is symbolic, aligned with cultural beliefs about prosperity. However, the trading process remains the same as regular sessions.

How do I prepare for Muhurat trading if I’m a new investor?

Answer Field

As a new investor, you should research stocks in advance and have a clear strategy. Muhurat trading time is ideal for making long-term investments or buying blue-chip stocks.

Does the stock market remain open for a full session on Muhurat trading day?

Answer Field

No, the stock market does not remain open for a full session on Muhurat trading day. It is open for a special one-hour trading session, and regular market hours are not applicable.

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