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Regular Trading vs Muhurat Trading

The Indian stock market is currently growing and surging upwards. So it has become a good option to invest in securities or trade in indices for traders and investors. The regular trading time in India runs from 09:15 A.M. to 03:30 P.M. So, what about Muhurat Trading 2024, then? Is it different?

Muhurat Trading is conducted on the auspicious occasion of Diwali every year. The Muhurat Trading Session usually starts in the evening session for 1 hour and the exact time is notified to traders and investors two/three weeks before Diwali. How is it different from Regular Stock Market Trading, then?

Let’s find out.

What is Muhurat Trading?

Diwali is one of the most celebrated and an auspicious festival in India. It also marks the beginning of the “Hindu New Year.” So making new investments, and acquiring new assets is considered to be very auspicious during this festival as people believe the Goddess of Wealth and prosperity, Laxmi ji will enter their lives. As this sentiment is so prevalent among the investing community, the stock exchange conducts a special 1-hour trading session every Diwali called “Muhurat Trading.”

The word “Muhurat” itself suggests that it is an auspicious time. The tradition of Muhurat Tradings started way back in 1957 by the Bombay Stock Exchange (BSE) and later on, it was adopted by the National Stock Exchange (NSE) in 1992. There are so many communities involved in the stock market, so there are many traditions for this day.

Some brokers open new settlement accounts for their clients because of this auspicious hour. Some worship their books on the account of Diwali. To put it in a general perspective, people believe it is an auspicious time to buy shares for long-term investments, especially in the name of family members.

Muhurat Trading is usually conducted on the day of Diwali in the evening session. Muhurat Trading 2024 will be conducted on 1st November 2024 and the exact timing shall be notified to investors and traders before 2-3 weeks of Diwali.

Regular Trading vs. Muhurat Trading: Key Differences

Muhurat Tradings is a special trading session conducted on the occasion of Diwali, whereas regular trading refers to the usual daily trading sessions on stock exchanges. While both sessions involve the buying and selling of securities, they differ in several aspects.

Regular Trading vs. Muhurat Trading: Key Differences

Here are the key differences:

1. Timing and Duration

Regular Trading:

Regular trading sessions occur daily from Monday to Friday, typically starting at 9:15 AM and ending at 3:30 PM IST on Indian stock exchanges. The session includes a pre-open market, normal trading hours, and a closing session.

Muhurat Trading:

Muhurat Trading is a special, short session that lasts for about an hour. The exact timing varies each year and is announced by the stock exchanges based on auspicious timings (Muhurat). It usually occurs in the evening, aligning with Diwali celebrations.

2. Symbolic Nature

Regular Trading:

Regular trading sessions are driven by regular market dynamics, including economic data, corporate earnings, and global events. The primary focus is on financial transactions and investment strategies.

Muhurat Trading:

Muhurat Trading is symbolic and is considered an auspicious time to trade, aligning with the cultural and traditional significance of Diwali. Many investors participate for ceremonial reasons, making small, symbolic investments to mark the start of a new financial year or to invoke prosperity.

3. Market Sentiment

Regular Trading:

Market sentiment during regular stock market trading can vary significantly based on news, economic indicators, and investor behavior. It can be bullish, bearish, or neutral depending on various factors.

Muhurat Trading:

The sentiment during Muhurat Trading is generally optimistic. The festive atmosphere and the belief in auspicious beginnings create a unique market environment, often leading to a temporary uplift in stock prices.

4. Trading Volume and Liquidity

Regular Trading:

Regular trading sessions usually have higher trading volumes and liquidity due to the participation of a wide range of investors, including retail, institutional, and foreign investors.

Muhurat Trading:

Diwali Muhurat Trading typically sees lower trading volumes compared to regular sessions. The session’s symbolic nature and shorter duration mean that fewer transactions occur, and liquidity may be limited.

5. Regulatory and Procedural Differences

Regular Trading:

Standard regulatory procedures apply, including market surveillance, margin requirements, circuit breakers, and settlement processes. Regular trading days are subject to routine market announcements and news releases.

Muhurat Trading:

Diwali Muhurat Trading follows the same regulatory framework but may have specific procedures for reporting and compliance given its unique timing. The session is often seen as an exception, with special announcements from exchanges and SEBI, the market regulator.

6. Participation and Investor Behavior

Regular Trading:

Investor behavior during regular stock market trading is influenced by financial goals, market analysis, and economic conditions. Investors typically make decisions based on long-term strategies, short-term opportunities, or speculative moves.

Muhurat Trading:

Participation in Muhurat Trading is often more ceremonial than strategic. Many investors, especially retail investors, make small, token investments to honor tradition rather than to achieve significant financial gains. The session may also attract those who wish to experience the market in a unique setting.

7. Market Impact and Long-Term Effects

Regular Trading:

Regular Stock Market Trading has a significant impact on market trends, stock prices, and investor portfolios. The cumulative effect of daily trading sessions shapes the long-term trajectory of the stock market.

Muhurat Trading:

The impact of Diwali Muhurat Trading on the market is typically short-lived. While it can result in a temporary spike in stock prices due to positive sentiment, it does not significantly influence long-term market trends or valuations.

FactorsRegular TradingMuhurat Trading
Timing and Duration9:15 AM – 3:30 PM IST, Monday to FridayTypically around 1 hour in the evening on Diwali
PurposePrimarily financial, driven by market dynamicsSymbolic and ceremonial, with cultural and religious significance
Market SentimentVaries based on economic and market conditionsGenerally optimistic
Trading VolumeHigher volume due to regular participationLower volume, with more symbolic investments
Regulatory FrameworkStandard regulatory rules and market surveillance applySame regulatory framework, but with specific session timing
Investor ParticipationWide range, including retail, institutional, and foreign investorsPredominantly retail investors, with ceremonial participation
Market ImpactSignificant impact on market trends and stock pricesMinimal long-term impact, short-term price fluctuations possible

Rituals and Beliefs Around Diwali Trading Muhurat

Muhurat Trading, held on the auspicious occasion of Diwali, is deeply rooted in Indian cultural and religious traditions. It is not just a regular trading session but a ceremonial event that combines finance with spirituality and cultural practices. Here are some key rituals and beliefs associated with Diwali Trading Muhurat:

Rituals and Beliefs Around Diwali Trading Muhurat

1. Auspicious Timing (Muhurat)

The term “Muhurat” refers to an auspicious time chosen for significant activities, believed to bring good luck and prosperity. During Diwali, the Muhurat Trading session is scheduled based on astrologically favorable timings. It is believed that trading during this specific period can lead to positive outcomes and financial success.

2. Opening New Accounts and Books

Many investors and traders, particularly those from business communities, see Muhurat Trading Diwali as the start of a new financial year. It is a common practice to open new trading accounts or financial books on this day, symbolizing a fresh beginning and the welcoming of wealth and prosperity.

3. Lakshmi Pujan

Lakshmi, the Hindu goddess of wealth and prosperity, is worshipped during Diwali. Before the Muhurat Trading session begins, many traders and investors perform Lakshmi Pujan at their offices, homes, or on the trading floor. This ritual involves offering prayers, lighting lamps, and making offerings to seek the goddess’s blessings for wealth and success in the coming year.

4. Token Investments

It is a common practice for investors to make small, token investments during Muhurat Trading Diwali, irrespective of market conditions. This act is considered a good omen, symbolizing the start of a prosperous journey. The emphasis is more on the act of investing rather than the financial returns.

5. Gifting and Sharing

Exchanging gifts and sweets is an integral part of Diwali celebrations, and this tradition extends to Muhurat Trading as well. Some investors gift shares or financial instruments to family members or friends, symbolizing the sharing of wealth and good fortune.

6. Celebration and Community

The atmosphere during Muhurat Tradings is festive and celebratory. It is a time for investors and traders to come together, often in traditional attire, to mark the occasion. Stock exchanges may also be decorated, and special events or ceremonies may be organized, adding to the festive spirit.

7. Prayers and Blessings

Many traders and investors seek the blessings of elders and family members before participating in Muhurat Tradings Diwali. This is seen as a way to honor traditions and seek guidance and good wishes for the financial endeavors ahead.

8. Avoidance of Negative Acts

On this auspicious day, it is believed that negative actions, such as arguments or unethical practices, should be avoided. The focus is on positivity, ethical trading, and harmony, reflecting the values of Diwali and the spirit of the occasion.

Also Read: Significance of Muhurat Trading on The Indian Stock Market

Tips for Successful Muhurat Trading

Tips for Successful Muhurat Trading
  • Set Clear Objectives: Decide if your participation is symbolic or for potential gains, and set realistic goals.
  • Research and Select Stocks: Focus on fundamentally strong stocks or sectors you are familiar with to minimize risks.
  • Limit Your Investment: Given the session’s symbolic nature, consider making small, token investments.
  • Avoid Speculation: Refrain from high-risk trading strategies; Muhurat Trading is not ideal for speculative trades.
  • Monitor Market Trends: Stay informed about market trends and investor sentiment leading up to the session.
  • Stick to a Budget: Set a budget for your investments and avoid exceeding it, maintaining financial discipline.
  • Keep Emotions in Check: While the session is festive, avoid letting emotions drive your investment decisions.

Conclusion

While regular trading sessions offer consistency and a routine trading environment, Muhurat trading provides a unique opportunity for participants to engage in trading with a spiritual and auspicious mindset. The decision to participate in either session depends on individual preferences, investment goals, and belief systems that guide trading activities.

For Muhurat trading 2023 not only has sentimental value but also the stock market dynamics has impacted to some extent. The positive sentiment and increased trading activity during this auspicious session can influence market trends, stock prices, and overall investor sentiment in the short term. Traders often observe the market behavior post-Muhurat tradings to gauge the momentum for the upcoming days.

Will you participate in Muhurat Trading or invest for the long term? Either way, a Demat Account is essential. Don’t miss out—open a Demat Account with Jainam today for absolutely FREE!

Regular Trading vs Muhurat Trading: Key Differences

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Written by Jainam Admin

August 8, 2024

11 min read

362 users read this article

Frequently Asked Questions

What is the significance of Muhurat trading in the Indian stock market?

Muhurat trading holds immense significance in the Indian stock market as it is considered an auspicious time to invest and trade. Participants believe that trading during this time can bring prosperity, wealth, and favorable outcomes in the coming year.

How is Muhurat trading different from regular trading sessions?

The primary difference between Muhurat trading and regular trading sessions lies in the timing and duration of the sessions. While regular trading occurs on all working days within specified hours, Muhurat trading is a special and brief trading session conducted on auspicious occasions such as Diwali. The sentiment, beliefs, and auspicious nature associated with Muhurat trading make it unique.

When is the Muhurat trading time today for Diwali?

The Muhurat trading time for Diwali varies each year and is announced by the stock exchanges in India. Usually, it is a one-hour trading session in the evening on the day of Diwali, allowing participants to make investment decisions and trade during this auspicious window.

What are some tips for beginners participating in Muhurat trading?

For beginners participating in Muhurat trading, it is essential to stay updated about market trends, conduct thorough research, set realistic goals, and have a well-thought-out trading plan before taking part in Muhurat Trading.

How does Muhurat trading impact stock market trends and investor sentiment?

Muhurat trading, with its aura of positivity and auspiciousness, can impact stock market trends and investor sentiment to some extent. The increased trading activity during this session, along with the sentiment of new beginnings and prosperity, can influence stock prices, and market dynamics in the short term. 

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