NEW DELHI: Muhurat trading is a one-off activity which happens at the Indian stock market during Diwali. It is between 6:15 and 7:15 on the evening of Diwali.
It is one of the traditions which had maintained links of the trading community, which mostly used to be Gujarati community, with its rich past. Before this session starts, investors place token orders and buy stocks for their children, which are held for the long-term and sometimes never sold. During the Muhurat session, these traders normally book their intraday profits, however small they may be.
It is customary for stock brokers to perform Lakshmi Puja at the exchange and then the Muhurat trading takes place. It is believed that Goddess Lakshmi comes and resides at the place of puja which is why traders and shopkeepers stay awake with all decorative lights.
Stock brokers perform 'Lakshmi Puja' at the exchange and the customary Muhurat trading takes place. It is believed that on the night of Lakshmi Puja, the Goddess comes to reside at the place of the puja during which the traders and shopkeepers stay awake with lights burning all night.
How did it start?
The tradition started with the first traders in the country. A puja is performed, new accounts are opened and new shares are bought on Diwali, marking the start of the Hindu New Year. It is believed that this would begin the new year on a right note.
However, this trading has a flip side because it is highly volatile during this session. The Muhurat trading session is an excellent time to buy or sell stocks since the trading volumes are high.