Understanding how much it costs to buy a single stock — A detailed analysis of trading units in US and Taiwan stocks

Why is buying one share of Taiwan stocks so expensive, while US stocks are so cheap?

Investors often face a question when entering the stock market: the same company’s stock can cost vastly different amounts depending on the market. Take TSMC as an example. In Taiwan’s stock market, buying one share costs about 560,000 New Taiwan Dollars, but in the US stock market, you can buy a share for only 3,000 New Taiwan Dollars. The core reason behind this difference is that the two markets have completely different definitions of trading units.

Taiwan’s stock market uses “one lot” (1000 shares) as the standard trading unit, whereas the US stock market uses “one share” as the minimum trading unit. This difference results in a much higher barrier to trading full lots in Taiwan compared to the US.

The Meaning of Stock Price: An Intuitive Understanding of Trading Prices

First, we need to understand what stock price means. The stock price refers to the transaction price of a share in the market, representing the amount an investor pays to buy or sell one share of stock.

Stock prices fluctuate in real-time based on the matching of buyers and sellers. Different countries or regions display stock prices in different currency units—US stocks are priced in USD, while Taiwan stocks are priced in TWD. As of 2024 market data, TSMC’s stock price in Taiwan is about 561 TWD, meaning each share costs 561 TWD.

How Much Is One Share? How to Check the Current Stock Price

The stock price essentially represents the transaction price of one share. For investors, the most straightforward way to understand how much a share is worth is to check the current market price.

For example, Tesla (TSLA) was priced at $101.81 USD on January 6, 2023; by August 2, 2023, its price had risen to $254.11 USD. In just seven months, the price of a single share more than doubled, vividly illustrating the dynamic nature of stock prices.

It is important to note that the face value (par value) of a stock has no direct relation to its market price. The face value is simply an identifier of the original capital contributed by shareholders. In Taiwan, the face value of a stock is usually 10 TWD, but the actual stock price is determined by the company’s profitability, market prospects, and investor expectations. As long as the company performs well and has a bright outlook, the stock price will continue to rise.

For example, Taiwan Cement (1101.TW) had a stock price of 32.10 TWD on April 30, 2024, which was the amount investors paid to buy one share at that time.

How Much Does One Lot of Stock Cost? The Trading Unit System in Taiwan Stocks

In Taiwan’s stock market, “one lot” is the basic trading unit. One lot equals 1000 shares, meaning buying one lot is equivalent to purchasing 1000 shares simultaneously.

If TSMC’s stock price is 561 TWD, then the capital required to buy one lot of TSMC is:

561 × 1000 = 561,000 TWD

This is indeed a large sum for ordinary retail investors—about 560,000 TWD. Due to the high barrier to trading full lots, Taiwan’s stock market has introduced a “odd lot” trading system.

Odd Lot Trading vs Full Lot Trading

Odd lot trading refers to buying or selling less than one full lot (1–999 shares). This trading method significantly lowers the investment threshold, allowing retail investors with limited funds to participate.

Because odd lot trading has less liquidity than full lot trading, professional investors are still advised to prioritize full lot trading. However, for newcomers or investors with limited funds, odd lot trading is undoubtedly a more practical choice.

US Stocks vs Taiwan Stocks: Fundamental Differences in Trading Units and Costs

The most fundamental difference between the two markets lies in the setting of trading units. Taiwan stocks use one lot (1000 shares) as the standard, while US stocks are traded in single shares, which directly results in vastly different trading barriers.

Taking TSMC, listed in both markets, as an example:

• Taiwan stock (code 2330): stock price about 561 TWD, buying one lot costs 560,000 TWD
• US stock (code TSM): stock price about $95 USD, buying one share costs only $95 USD (about 3,000 TWD)

US investors can establish positions at very low costs, whereas Taiwanese investors need to prepare a relatively large amount of capital.

Besides the trading units, there are also significant differences in trading fees, price limit rules, and other aspects. US stocks generally have zero commissions, while Taiwan stocks require paying a transaction fee.

Factors Influencing Stock Prices

The final stock price is determined by the market, but multiple factors influence it:

Company fundamentals are the primary factor. Companies with strong financial health, high profitability, and bright prospects attract investors, pushing up stock prices. Investors can evaluate fundamentals by reading financial reports.

Macroeconomic environment also has a profound impact. Indicators such as GDP, unemployment rate, and inflation influence the overall market trend and, consequently, individual stock prices.

Market sentiment is often underestimated but has powerful influence. Negative news, political risks, or global events (like pandemics) can trigger investor panic, leading to market declines. Conversely, positive news can stimulate enthusiasm and drive stock prices higher.

Three Steps to Get Started with Stock Trading

1. Open an account — Fill in necessary information and submit an application
2. Prepare funds — Deposit trading capital quickly through various methods
3. Start trading — Identify opportunities and execute trades swiftly