Stock Conversion Cheat Sheet: Why is buying one share of Taiwan stocks so expensive, while US stocks are incredibly cheap?

Many newcomers to the stock market have this question: why can you buy a share of the same company in the US stock market for just a few tens of dollars, but in the Taiwan stock market it costs several tens of thousands of dollars to buy a lot? What’s going on here? Actually, the secret lies in the design of the “trading units.”

The Big Difference in Trading Units: “Lot” in Taiwan vs “Share” in the US

The biggest difference between Taiwan stocks and US stocks is that they use different trading unit systems.

In the Taiwan stock market, the basic trading unit is called a “lot,” which represents 1,000 shares. That is to say, if you decide to buy one lot of TSMC, the system will automatically buy 1,000 shares of TSMC for you. In contrast, US stocks are much simpler—traded in “shares,” and you can buy as many as you want without any minimum lot size.

This design difference directly causes the price disparity investors see. For example, TSMC’s stock price might be NT$561, and its US stock price NT$95, so:

• Buying one lot of TSMC in Taiwan costs: NT$561 × 1000 = NT$561,000 (about 560,000 NT$)
• Buying one share in the US costs: $95 (about NT$3,000)

The same company, the entry barrier differs by more than 18 times.

Stock Price, Number of Shares, Face Value: Three Concepts That Are Easy to Confuse

What is stock price? How to read it?

Stock price is the real-time transaction price at which investors buy and sell stocks in the market, representing how much one share costs at the moment. It fluctuates based on bids and asks from buyers and sellers and is a dynamic number.

For example, Tesla (TSLA) had a stock price of $101.81 on January 6, 2023, and by August 2, it had risen to $254.11. The cost to buy one share in the same period and for the same company nearly 2.5 times higher. This demonstrates the power of real-time stock price movements.

How much is one share? Just look at the current market price

For investors, understanding the price of one share is quite simple—it’s the current market quotation. No need to worry about face value or complex calculations. Just open your trading software and look at the quote; that number is the price of one share.

For example, on April 30, 2024, Taiwan Cement (1101.TW) is quoted at NT$32.10. This means buying one share of Taiwan Cement costs NT$32.10.

Face value ≠ Stock price

Here’s a common pitfall: many people confuse “face value” with “stock price.” Face value is a historical concept, mainly used to record the amount of capital invested per share when the company initially issued stock, and it is usually fixed. Most listed companies in Taiwan have a face value of NT$10, because Taiwan used to implement a fixed face value system.

But stock price is entirely different; it is determined by the market and fluctuates with the company’s profitability and investor expectations. A stock’s face value is always NT$10, but its stock price can range from a few yuan to hundreds of yuan.

How Much Does One Lot of Stock Cost? Whole Shares vs Fractional Shares

Calculating the cost of one lot is simple

Since 1 lot = 1000 shares, the cost of one lot is: Stock Price × 1000

For example, TSMC’s stock price is NT$561, so one lot costs NT$561,000. For most retail investors, this amount can be quite hefty, which has led to the development of two trading modes in Taiwan stocks: “whole lots” and “fractional shares.”

Whole lot trading vs fractional share trading: pros and cons at a glance

Whole lot trading involves buying and selling in minimum units of one lot (1000 shares). It offers high liquidity and quick transactions but requires a capital of several hundred thousand NT$, which can be a barrier for ordinary investors.

Fractional share trading allows buying and selling from 1 to 999 shares, significantly lowering the entry barrier. However, it comes with disadvantages such as lower liquidity, slower matching (usually once per minute), and limited trading hours.

US Stocks vs Taiwan Stocks: Practical Differences in Stock Conversion

Besides the different trading units, US stocks and Taiwan stocks also have many other differences in stock conversion and trading rules worth noting.

Chain reaction caused by trading units and price bands

Because US stocks are traded in “shares” and Taiwan stocks in “lots,” the entry costs for investors differ greatly. Additionally, US stocks have a 10% limit on daily price movements, while Taiwan stocks have no such limit, affecting the volatility range.

Fees and trading hours

US stock trading fees are generally lower, with many brokers offering zero-commission trading. In contrast, Taiwan stock transaction fees are 0.1425% of the transaction amount, which can be a significant cost for frequent traders.

In terms of trading hours, US markets operate on daylight saving time from 21:30 to 04:00 (winter time 22:30-05:00), while Taiwan stocks only trade during regular hours from 09:00 to 13:30, leading to differences in liquidity and trading opportunities.

The Three Major Factors That Determine Stock Price Levels

After understanding the logic of stock conversion, it’s also important to grasp what drives stock prices up and down. Many factors influence stock prices, but they can be summarized into three main categories:

1. Company fundamentals are key

The financial health, profitability, and growth prospects of a listed company directly reflect in its stock price. A company that consistently profits and shows steady growth will attract more investors, and its stock price will naturally rise. Conversely, poor performance will lead investors to sell off, causing the price to fall.

2. Macroeconomic factors have a big impact

Indicators like GDP growth rate, unemployment rate, and inflation data have a profound effect on the overall stock market. During economic booms, stocks tend to perform well; during recessions, the market also adjusts downward.

3. Market sentiment is crucial

Investor optimism or pessimism can change stock trends in the short term. Negative news, political risks, or global emergencies (like pandemics) can trigger panic selling, leading to sharp declines. Conversely, positive news can bring in buying momentum.

These three factors interact to shape both the long-term trend and short-term fluctuations of stock prices.