What is Muhurat Trading?

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What is Muhurat Trading?

The word ‘Muhurat’ means an auspicious time as per the Hindus so the mean of ‘Muhurat Trading’ is trading on an auspicious timing.

Muhurat Trading is an old ritual in Indian stock market. This is a one-hour time period that is convened on the day of Diwali (Deepawali) by the Indian traders and investors. This unique practice is done in the Indian stock market only.

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History of Muhurat Trading-

The point to be noted is that the business and broking communities consider Diwali as the start of the new year so the Bombay Stock Exchange (BSE) started the tradition of Muhurat Trading in 1957 and the National Stock Exchange (NSE) started the same in 1992.

Muhurat Trading in 2023-

In 2023, Muhurat Trading will take place on 12th November (starting of Sambat 2080) from 6:15 to 7:15 PM IST. Here are the Muhurat Trading related timings for both BSE and NSE-

EventTimingDescription
Block Deal Session5:45-6:00 PM ISTIn this time period, two parties agree to buy/sell a security at a fixed price and inform stock exchange about it.
Pre-Open Market6:00-6:08 PM ISTThe stock exchange determines the equilibrium price.
Normal Market6:15-7:15 PM ISTThis is the time period when most trading takes place.
Call Auction Illiquid Session6:20-7:05 PM ISTIn this time period, illiquid securities are traded.
Closing Session7:25-7:35 PM ISTA trader/investor can place an order at closing price.

Significance of Muhurat Trading-

Muhurat trading holds special significance for traders and investors as an auspicious time to start new ventures, inviting prosperity into financial endeavors. Believed to bring wealth and success, trading during this auspicious period is a tradition. In the previous years, both Sensex and Nifty indices saw positive gains, emphasizing the positive outcomes associated with this ceremonial trading session.

Tips and Strategy for Muhurat Trading-

  • Don’t be over excited during the Muhurat session.
  • Don’t overtrade.
  • Make a proper plan before trading/investing.
  • Don’t follow rumours.