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Muhurat Trading 2022: All that you need to know

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Muhurat Trading Timing Date 2022 | How to Pick Best Stocks
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In India, many families and individuals prefer to begin something at the right Muhurat. Muhurat means an auspicious time to initiate an activity. Whether it is buying a new house, a new car, or a new business – everything must align with the position of the stars at the right time.

Diwali is considered to be the new year as per the Hindu calendar. So, people start by investing in the right stocks to secure their future. It is believed that trading on Diwali day because it is so auspicious, will bring new luck, success and prosperity to your portfolio.

Muhurat Trading is an hour-long trading session scheduled on the special day of Diwali. It is a traditional ritual that symbolizes investing for your future during the most auspicious one hour.

Muhurat Trading Timing and Date

Diwali is a festival of light and warmth, which brings prosperity, wealth, and happiness. Hence, an hour-long trading window is opened for investors to participate in the stock market during these hours.

For the year 2022, Muhurat Trading Timing is scheduled for 24th O24th October. The trading window will open for an hour, between 6:15 pm and 7:15 pm on 24th O24th October.

Mahurat Trading Day Timings for Different Segments
Segment Trade Timing Trade Duration Pre-open session
Equity 6:15 PM - 7:15 PM 1 Hour 6:00 PM - 6:08 pm
Equity and F&O 6:15 PM - 7:15 PM 1 Hour 6:00 PM - 6:08 pm
Commodity Derivative 6:15 PM - 7:15 PM 1 Hour 6:00 PM - 6:08 pm
Currency Derivative 6:15 PM - 7:15 PM 1 Hour 6:00 PM - 6:08 pm
Securities Lending & Borrowing (SLB) 6:15 PM - 7:15 PM 1 Hour 6:00 PM - 6:08 pm

The usual schedule for any trading day starts at 9 am with a pre-market for 7 minutes, which includes block deals, overnight trade settlements, and global market movements priced into the stock prices. This is followed by a regular trading session from 9:15 am to 3:30 pm.

Muhurat Trading also follows a very similar structure.

It starts with a block deal session followed by a pre-open market session for about 7 minutes for the prices to settle. This is followed by a regular trading session for about an hour which all buyers and sellers can participate just like any other trading day. But Mahurat Trading lasts only for an hour.

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History of Muhurat Trading

The oldest exchange in India, the Bombay Stock Exchange (BSE), started the ritual of Muhurat Trading on the auspicious day of Diwali, way back in 1957. In 1992, the National Stock Exchange (NSE) adopted the practice of Mahurat Tradin,g and since then, it has been a norm for both stock exchanges.

Significance of Muhurat Trading and How to Pick Stocks

For people believing in the alignment of auspicious planets, stars, and timings, Diwali brings good luck, prosperity and lots of money.

Thus, Diwali can be an excellent start to your investing journey. You should look for good stocks with sound fundamentals and prosperous future earnings to be part of your portfolio. Therefore, the muhurat trading session should be focused on buying good stocks with excellent prospects for the long term.

Since the Muhurat Trading window is open only for an hour, the markets tend to be volatile. Therefore, we compiled the data on market movement on Muhurat Trading Day over the last decade.

10 Year Mahurat Trading Nifty Performance
Year Date Nifty Day Movement
2021 04-11-2021 0.49%
2020 14-11-2021 0.47%
2019 27-10-2019 0.37%
2018 07-11-2018 0.65%
2017 19-10-2017 -0.63%
2016 30-10-2016 -0.14%
2015 11-11-2015 0.54%
2014 23-10-2014 0.23%
2013 03-11-2013 0.28%
2012 13-11-2012 -0.29%
2011 26-10-2011 0.20%

As you can see, over the last ten years, the stock market delivered positive returns in the range of 0.2% to 0.7% on 7 out of 10 Mahurat Trading sessions.

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Between 2011 and 2022, NIFTY has grown more than 3 times, while several individual stocks turned into multibaggers with 10x returns. So, if you believe in starting on an auspicious day, the day of Muhurat Trading is the day to begin your wealth-creation journey.

Let’s put this into perspective. Nifty has grown at a compound annual growth rate (CAGR) of over 11% over the last 11 years. So if you had invested Rs. 10 lakhs on the Muhurat Trading Day in 2011, your investments would have been worth Rs. 32.91 lakhs as on 12 October 2022.

image 1
The Nifty level for 2022 is as of 12 October
source: Investing.com

Here are a few things to keep in mind before participating in Muhurat Trading

  • The Muhurat Trading session will occur on 24th Octo24th October, and the trading window will open for an hour between 6:15 pm and 7:15 pm as per the BSE’s latest circular.
  • Muhurat Trading is like a typical trading day. It is actually trading with real money. All open positions at the end of the session become a settlement commitment. Be mindful of your trades.
  • Most stock market participants – Brokers, traders, and investors consider this time of the year to be significantly favorable for investing and participating in the stock market. Thus, the number of people actively participating in Muhurat trading is more than usual.
  • Picking stocks to buy based on business fundamentals never goes out of fashion. Hence, as a long-term investor, you should look for businesses with a strong industry standing, continuous rise in revenues and profits, positive cash flow etc., to invest on the day of Mahurat Trading.
  • The primary investing mantras still hold. But first, you should invest based on your risk appetite and financial and personal goals.
  • During this time, investors are pretty excited. However, rumours and tips may be shared with alacrity, so investors must be careful.
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The takeaway for Muhurat Trading 2022

Muhurat Trading Day is a sign for those waiting on the sidelines and looking for the right time to start investing in the stock markets on the day. Though it is called Mahurat Trading, an investor can consider it a Mahurat Investing Day to begin investing in stock market for wealth creation.

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FAQs

Can we buy and sell during Muhurat trading?

Yes. The Muhurat Trading session is typically considered an auspicious time to invest your money for the long term. Therefore, it is an excellent time to buy or sell stocks, as many investors and brokers look forward to this event. Hence, the trading volumes are pretty high compared to the daily average trading volumes.

What is the typical sentiment of the market during Muhurat Trading Day?

Usually, the market is bullish and optimistic because of the auspicious day of Diwali. The festival is focused on ushering in new luck, wealth, and prosperity. Therefore, people are hopeful about the future of stock markets and the overall financial situation of the economy.

Is intraday allowed in Muhurat Trading?

Muhurat Trading Day is similar to any other trading day. So, there are no regulations that prohibit intraday trading. However, trading tends to be difficult on Muhurat Day as many buyers and sellers are looking to invest in a limited time window. Therefore, it makes the markets very volatile on the trading day.

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