Muhurat Trading 2023: The Special Diwali Session3 min read
‘Muhurat Trading’ is held every year on the occasion of Diwali. The stock market exchanges open for a customary one-hour trading session on Diwali. Investors place orders and buy stocks for them and their children, which are held for the long term, traders usually book their intraday profits.
Muhurat Trading History & Importance
More than six decades ago, the tradition of Muhurat trading was born at the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) also subsequently embraced this auspicious tradition.
“It is a symbolic and old ritual that has been retained and observed for ages by the trading community. As Diwali also marks the beginning of the New Year, it is believed that Muhurat trading on this day brings wealth and prosperity throughout the year,” as per exchanges.
Date & Timing
Muhurat trading this year will be conducted on Sunday, 12th November 2023. Unlike the usual weekdays, the Muhurat Trading window is only open for an hour at a pre-decided time. Predominantly, the Muhurat Trading session is categorised into the following parts:
1. Block Deal Session
In this, the buyers and sellers agree to buy/sell a security at a fixed price and inform the concerned stock exchange about it.
2. Pre-Open Session
This session usually lasts for eight minutes and decides the equilibrium price.
Normal Market Session – In this one-hour segment, trading happens like the usual market sessions.
3. Call Auction Session
This session is especially for illiquid securities to trade.
Timings of Muhurat Trading shall be notified subsequently in a separate circular by exchanges, actual timings may vary.
Based on the historical reference of the last 10 years, markets have made Muhurat Trading day delightful for 7 out of 10 years. The post-Diwali market is also usually bullish and offers short-term investment opportunities for risk-averse investors. If you are planning to start your stock market investment journey, that is perhaps the most auspicious time of the year.
All trades executed in this Muhurat trading session shall result in settlement obligations hence it is important for market participants to exercise caution while trading during this time.
Please note that all intraday positions will be squared off 15 minutes prior to market closing.
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Frequently Asked Questions-
1. Which stock exchanges in India allow Muhurat Trading?
Both the exchanges, the NSE and the BSE participate in Muhurat Trading. They come together to observe this unique tradition of Diwali-Laxmi Pujan.
2. Who can participate in Muhurat Trading?
Anyone who has a trading account with a registered stockbroker can participate in the Muhurat Trading session.
3. When and for how long is the Muhurat Trading session?
Muhurat trading in the year 2023 will take place from 6:15 PM to 7:15 PM on Sunday, 12th November 2023.
4. Is intraday allowed in Muhurat Trading?
Yes, you can carry out intraday trades during Muhurat Trading, but plan ahead all your intraday trades will be squared off 15 minutes prior to market closing.