The Festival of Lights – Diwali is an auspicious time according to the Hindu calendar. The word ‘Muhurat’ means an auspicious time. It is considered a time when planets are aligned favourably to ensure positive results.
Muhurat Trading is a one-hour time that is considered auspicious on the day of Diwali for investing in shares. The stock exchange specifies the time of Muhurat trading every year.
Typically, this period is during the evening of Diwali and most people prefer buying stocks as a token of Goddess Lakshmi. This is unique to the Indian stock markets only.
What happens in Muhurat Trading?
On Diwali, both the NSE (National Stock Exchange) and BSE (Bombay Stock Exchange) offer trading for a limited time. Typically, the session is divided into the following parts:
Block Deal Session – where two parties agree to buy/sell a security at a fixed price and inform the stock exchange about it.
Pre-Open Session – where the stock exchange determines the equilibrium price (usually around eight minutes).
Normal Market Session – the one-hour session where most trading takes place.
Call Auction Session – where illiquid securities are traded. Security is termed illiquid if it satisfies the criteria set by the exchange.
Closing Session – where traders/investors can place a market order at the closing price.
Get the benefit of Muhurat Trading
The Muhurat trading Session is a good time to buy or sell stocks since the trading volumes are high. Also, usually, the market is bullish since the festive spirit focused on prosperity and wealth. Hence, it is a good time for both investors and traders to benefit from the Muhurat trading session.
The Muhurat trading session is usually filled with a lot of excitement. Being an investor, you must ensure that you stick with the fundamentals of a company before investing in its stock for the long term or you can get a professional investment service. Stick with the basics and invest in sync with your investment plan and risk tolerance.
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Happy investing and a very happy Diwali!
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