Introduction to Muhurat Trading
Muhurat trading is the trading window that stays open on the day of Diwali for one hour. ‘Muhurat’ in the traditional calendar refers to a space of time in the day which is considered the most auspicious.
Understanding Muhurat Trading
Diwali is considered as the New Year for many households in India. The Muhurat window on the occasion of Diwali signifies that investing or trading on this day will yield good returns. As such, the stock exchange opens the trading window for retail investors and stock broking houses like any other weekday to place their trades and make some profit, or simply invest during the good time. Before the introduction of the new financial year, traditionally stockbrokers started the year on the day of Diwali, when they opened new settlement accounts. Many stockbroking families, traders and merchant communities, native usually to Gujarat and Northern Maharashtra, performed the Chopda Puja to honour and worship their books of accounts. The idea carried on to the trading avenue in faith that investing money in a strong company will hold benefit in the long run. On the day of Muhurat trading, BSE and NSE open trading windows for nearly 2 hours, in which the normal session usually commences from 6:15 PM to 7:15PM, with block deal session and pre-open session prior to the normal session and call auction and closing session after the normal.
Highlights of Muhurat Trading
Muhurat trading is specific to the Indian Stock Market only. Muhurat trading window opens during the evenings on Diwali, unlike the weekdays when the trading session ends by 3:30 - 3:45 PM. Unlike regular sessions, when the stock exchange remains closed, muhurat trading is also special due to it being on a national holiday. Markets are highly volatile, which is great to make profits during the one hour that it remains open. Muhurat trading is more symbolic than cultural now. It is made in good faith that by investing in companies, you are channeling your funds, trust and support for them and wishing for their stellar performance.
