Muhurat Trading in Share market
Know Everything about Muhurat Trading in detail, Timing, Tips
Muhurat Trading is a trading session in which investors trade to celebrate the auspicious day Diwali. The trading is a common ritual followed by the traders in India. As the term Muhurat depicts, which means auspicious time, the trading time is considered auspicious on the day of Diwali for investing in shares.
What is Muhurat Trading?
The stock exchanges in India, National Stock Exchange and Bombay Stock Exchange open one hour window for trading on Diwali which is otherwise declared as a holiday, is called Muhurat Trading. The exchanges in India, every year decide the timings of opening and closing of trading windows .
Investors believe that if they invest in stocks on the auspicious day, it will be good for them. Also, it will gain prosperity throughout the year.
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Sessions of Muhurat Trading:
We can divide Muhurat Trading in five sessions, which are listed below –
- Block Deal Session: As the name depicts, when two parties agree to buy or sell a particular stock at a fixed price, they inform the stock exchange about the deal. This is called a block deal session.
- Pre-open Session: Pre-open session is generally for 8 minutes before opening of actual trading window.
- Normal Trading Session: This is the time when investors trade on exchange. One hour is set for Muhurat trading.
- Call auction session: The securities, satisfying the criteria of exchanges set to define a stock as liquid security, are traded in this session.
- Closing Session: The investors can place orders on closing price in this session.
Muhurat Trading timing for year 2023:
The timings are decided by exchanges in India. As per national stock exchange the timings of Muhurat trading are given below –
| Muhurat Trading Session | Capital Market | Equity Derivatives | CurrencyDerivatives | Cross CurrencyDerivatives | CommodityDerivatives | SecuritiesLending &BorrowingScheme (SLBS) |
| Block Deal Session Open – Close | 17:45 – 18:00 hrs | – | – | – | – | – |
| Pre-Open Market Open – Close | 18:00 – 18:08 hrs | – | – | – | – | – |
| Normal Market Open – Close | 18:15 – 19:15 hrs | 18:15 – 19:15 hrs | 18:15 – 19:00 hrs | 18:15 – 19:15 hrs | 18:15 – 19:15 hrs | 18:15 – 19:15 hrs |
| Call Auction Illiquid session* | 18:20 – 19:05 hrs | – | – | – | – | – |
| Closing Session | 19:25 – 19:35 hrs | – | – | – | – | – |
| Trade modification | 18:15 – 19:45 hrs | 19:25 hrs | 19:10 hrs | 19:25 hrs | 19:25 hrs | – |
Important things to keep in mind in Muhurat Trading:
Since it is considered an auspicious occasion to trade, there is always a heavy volume in trading. Almost every investor invests money in a time of one hour. Hence there are some important points which you need to keep in mind while Muhurat Trading. See these points below-
- If you are going to start your investment journey from this auspicious day, remember to invest in stocks which are sustainable and have a strong business model.
- Stay off companies that are undergoing a crisis, or market fluctuations.
- Mitigate risks and balance out losses and gains whenever the market is volatile, to do this diversify the portfolio.
- The portfolio consists of both large-caps and mid-cap stocks.
- Do some research prior to investing in stocks
- Keep your investment limited to the amount which you own. Don’t borrow for investment or use enhanced limits provided by brokers.
- Look for high-quality companies and purchase some stocks with a long-term horizon and in sync with your investment plan.
- Traders must keep a close eye on the resistance and support levels
- Investors must ensure that they stick with the fundamentals of a company before investing in its stock for the long-term.
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