Muhurat Trading 2024: Share Market Dates & Timings, Meaning, Tips & Benefits

Last Updated: 24 Oct 2024

Muhurat Trading is a unique trading session that takes place during the festival of lights, Diwali. It is considered a lucky moment to trade in the Indian stock market. Read the article to know the exact time and date of Muhurat Trading 2023 specified by the stock exchanges.

What is Muhurat Trading?

Muhurat trading refers to trading that occurs during certain auspicious times as fixed by a calendar. This form of trading has been prevalent in Indian stock markets for many years and recently gained prominence as an alternate way to trade stocks.

The main purpose of these ‘trading hours’ is to allow investors who may not be able to actively participate in trading all year round to participate during special festivals like Diwali, Dussehra, etc., depending on one’s religion (Hindu, Muslim, Christian or other).

The other objective of these trading sessions is to allow retail investors access to institutional brokers through High-Frequency Trading (HFT) platforms without having access all year round. Recently, the NSE (National Stock Exchange of India Limited) has also provided facilities for online Muhurat Trading available every day.

During regular market hours, these activities are deemed illegal since it interferes with any activity occurring at that time. For example, if Nifty futures contracts worth ₹5 million were traded during regular market hours, then another ₹10 million will have to be sold/bought at regular market prices thereby affecting its future price due to excess demand/supply.

Muhurat Trading 2024 Time and Date

This year Diwali is falling on Friday, 01st November 2024. So Muhurat trading will take place on this day. It will take place between 6 p.m. and 7:00 p.m. in the evening. The 15 minute pre-market session will be from 5:45 p.m. to 6:00 p.m.

Event	Time
Pre-Open Session	5:45 PM – 6:00 PM IST
Muhurat Trading	6:00 PM – 7:00 PM IST
Post-close	7:30 – 7:38 PM IST
Market Close	7:40 PM IST

Many investors consider trading in the Muhurat hour on Diwali as favorable and auspicious. Trading takes place in the usual way during Muhurat trading as on any other day. Trading takes place in equities, currency & commodity derivatives, equity derivatives such as futures & options etc. Block deals take place on this day and so do normal trades. Pre-market bids and closing bids can also be made.

Who Can Benefit from Muhurat Trading?

There is a long-standing tradition of Diwali Muhurat Trading Sessions in India. According to Hindu tradition, there are specific times when actions must be undertaken. Hindus have been following astrological recommendations for thousands of years now, and they believe that certain activities must be carried out at precise moments in time. In India, financial markets have been closed on occasions when major events took place.

Investors can benefit from Diwali Muhurat Trading Sessions, particularly those who want to buy or sell a large number of shares. Because many retail investors have limited knowledge about market trading, they often struggle to figure out which day is considered auspicious for trading. For instance, you might know that Friday and Saturday are considered bad days for buying stocks. However, since each stock has its Muhurat date, you will have to do more research on that before doing any transaction.

Advantages of Muhurat Trading

Below are the benefits of stock market Diwali Muhurat trading:

• Symbolic Significance: It marks an auspicious start to the trading year based on religious and cultural beliefs, particularly during Diwali.
• Positive Market Sentiment: Traders often approach the session optimistically, potentially resulting in bullish trends.
• Tradition and Blessings: Many investors believe that trades made during this period bring good fortune for the year ahead.
• Short Session: The limited trading window reduces market volatility and allows for focused trading.
• Investor Participation: It encourages wider participation, even from conservative investors, adding liquidity to the market.

Disadvantages of Muhurat Trading

Here are the disadvantages of stock market Diwali muhurat trading:

• Limited Trading Hours: The short session restricts market movement and trading opportunities.
• Lower Liquidity: While participation increases, overall liquidity might be lower than regular trading days, leading to wider bid-ask spreads.
• Emotional Trading: Investors might make impulsive or sentiment-driven decisions driven by tradition rather than market fundamentals.
• Limited Global Impact: Global markets are usually closed during this session, so external market cues and reactions may be delayed.
• High Volatility Risk: Due to lower volumes, price swings can be more pronounced, leading to potentially higher risks for short-term trades.

Things to Keep in Mind Before Indulging in Muhurat Trading

Here are the important things you keep in mind before indulging in Muhurat trading:

• Muhurat trading is a symbolic ritual and does not guarantee returns. Do your due diligence before investing rather than blindly following auspicious Muhurat timings. Analyse the company’s financials, management, industry outlook, etc., before investing.
• Review your investment objectives and risk appetite. Muhurat trading often witnesses high volatility. If you are a conservative investor, avoiding trading during this session may be better.
• Check the stock’s liquidity before investing. Since Muhurat trading lasts only for an hour, invest only in stocks with good volumes and liquidity. Thinly traded stocks can see large price swings.
• Have a trading plan in place. Set entry/exit points, position sizing, stop losses etc., beforehand. The short trading window calls for discipline and sticking to a trading plan.
• Manage risk well. Volatility can bring opportunities but also significant losses if trades go wrong.Use stop losses, don’t overload on a single stock, and book profits at target levels.
• Review existing open positions in advance. Square off positions before muhurat trading to avoid settlement obligations. Also, factor in MTM losses/gains on existing positions while planning new trades.
• Don’t get swayed by tips, rumors or euphoria. Stick to your own analysis. There will be a lot of chatter during this session which may not be reliable.
• Monitor trading volumes and price movements. Observe market direction and sentiment. High volumes on either side could indicate potential breakouts or breakdowns.
• Be ready for quick action and reversals. Given the short trading window, price trends can reverse rapidly. Be nimble and ready to book profits or cut losses.

Should I buy shares at the opening bell?

Timing is crucial when trading during the Diwali muhurat session. Brokers generally suggest starting to trade around 20 minutes before the opening bell. However, if stocks remain locked beyond 17 minutes after the opening bell, it’s best to exit immediately as sudden price movements often occur then due to automatic broker trades executing.

Whether to buy right at the opening bell depends on your goals. Buying early can help benefit from upward price movements as stocks likely open higher than the previous close. However, waiting until prices settle down after the initial volatility may be better if avoiding losses is the priority.

Overall, the Diwali muhurat trading session provides a good opportunity for maximum profits if traded wisely. However, there are always unpredictable circumstances in trading. The best approach is to be aware of all relevant factors and have contingency plans in place in case things don’t go as expected. This allows you to avoid wasting money, time or energy even if trades don’t work out as originally planned. Being adaptable and managing risk is key to trading successfully during this volatile session.

History of Muhurat Trading

• Traditionally, brokers start their new financial year on Diwali. They open new account books and perform puja.
• There were beliefs that Marwari traders sold stocks during Muhurat because money should not enter homes on Diwali, while Gujaratis bought stocks because they considered it auspicious.
• Now, Muhurat trading is more symbolic than cultural. The timing is considered auspicious rather than mandatory.
• Most Hindu investors perform Lakshmi puja and then buy shares in strong companies for long-term returns.
• Chopda pujan or worship of account books, is still practised by some brokers.
• While earlier it marked the start of a new settlement period, it is now a ceremonial one-hour session across exchanges.
• Participation has become voluntary. Many traders and investors consider the timing lucky for entering new investments.
• The atmosphere is upbeat and optimistic during the Diwali muhurat trading session, representing hopes for a prosperous new year.

What Happens in Muhurat Trading?

• Block Deal Session – Pre-agreed purchase/sale of shares at a fixed price is reported to the exchange.
• Pre-Open Session – The exchange sets the equilibrium price, usually in 8 minutes.
• Main Trading Session – The core 1-hour session where bulk trading activity occurs.
  Call Auction for Illiquid – Illiquid securities, as defined by the exchange, are traded.
• Closing Session – Traders can place market orders at closing prices.

NSE and BSE allow Muhurat trading on Diwali for a limited period. The structured sessions facilitate trading across liquid and illiquid securities during the auspicious hour.

Tips for Muhurat Trading

Below are some of the tips for Muhurat trading:

• Do thorough research on companies before investing. Don’t blindly buy based on auspicious timing. Look at fundamentals, technicals, management quality, etc.
• Have a plan for entries and exits. Book profits at pre-set levels as trends can reverse rapidly. Use stop losses to limit the downside.
• Trade liquid stocks only as volumes tend to be higher. Illiquid penny stocks are risky.
• Control emotions and greed. Don’t fall for rumours or herd mentality. Stick to your trading plan.
• Manage risk well. Market volatility can bring losses if not carefully controlled. Don’t overload capital on one stock.
• Monitor key levels and volume surges for trading cues. Stay nimble.
• Muhurat trading is risky, given volatile swings. Be prepared for all outcomes. Success requires research, discipline and risk management.

Frequently Asked Questions

Can buying be done on Muhurat Trading day?

Yes. As explained above, trading is done in Muhurat Trading hour as on any other day. You can both buy and sell stocks during Muhurat Trading hours.

Can selling be done on Muhurat Trading Day?

Yes. As explained above, trading is done in Muhurat Trading hour as on any other day. You can both buy and sell stocks during Muhurat Trading hours.

When is the Muhurat Trading time announced for Diwali?

The National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) decide the timing for Muhurat trading. This year it will occur on November 1, 2024. The stock markets have released notices announcing the schedule.

Trading will take place in stocks, securities lending, futures, options, currencies, and derivatives during the same one-hour time slot from 6:15 PM to 7:15 PM IST. Before that, there is a pre-open session from 6:00 PM to 6:08 PM. After that, there is a post-close session from 7:30 PM to 7:38 PM. The market will close at 7:40 PM IST. The schedule aims to provide a uniform Muhurat trading window across the major stock exchanges and financial instruments.

Is intraday allowed in Muhurat Trading?

Yes, intraday trading is allowed during Muhurat Trading 2024. Traders can buy and sell stocks within the short session to capitalise on quick price movements. However, caution is advised due to the brief duration and potential volatility, as price fluctuations may be more pronounced than on regular trading days.

Is Muhurat Trading profitable?

Muhurat trading 2024 can be profitable for short term traders adept at riding volatility in the brief trading window. However, profits are not guaranteed based on auspicious timing alone. Success depends on thorough market analysis, liquid stock selection, disciplined risk management, and the ability to control emotions and herd mentality during a volatile session.