Why are U.S. stocks cheap and Taiwanese stocks expensive? The truth about how many shares are in one stock

Many novice investors encounter the same question when entering the stock market: Why does it cost only a few tens of dollars to buy a share in the US stock market, but in Taiwan, buying one lot costs hundreds of thousands of New Taiwan Dollars? Where does this difference come from? The core reason lies in the completely different trading units used in the two markets.

Basic Concepts of Stock Trading: Stock Price, One Share, One Lot

To truly understand this issue, you first need to clarify three basic concepts.

What is the stock price?

The stock price is the real-time trading price of a stock in the market. It represents how much money an investor needs to spend to buy one share of stock, or how much income they can get from selling one share. The stock price is not fixed; it constantly fluctuates based on real-time matching of buy and sell orders. Different countries’ stock markets use different currencies, such as USD for the US market and TWD for Taiwan.

What does one share represent?

Public companies are limited companies that raise capital by dividing the company’s equity into units, with the smallest trading unit called “one share.” The stock price reflects the price of “one share.” For example, if a company’s capital is 10 million TWD and it is divided into 1 million shares, then the face value of one share is 10 TWD. (Note: Face value and stock price are two different things; stock price is determined by company earnings and investor expectations.)

How many shares are in one lot?

This is a concept unique to the Taiwan stock market. In Taiwan, 1 lot equals 1,000 shares. That is, when you buy one lot of stock in Taiwan, you are actually buying 1,000 shares. The US market does not have the concept of “one lot”; the trading unit is directly one share.

Why is there such a big difference in trading costs between US stocks and Taiwan stocks?

Let’s illustrate with real examples.

TSMC is listed in both Taiwan and the US. As of April 30, 2024, the stock price of TSMC (code 2330) in Taiwan is 32.10 TWD, and in the US (code TSM) it is about $95.

Buying one lot of TSMC in Taiwan: 32.10 × 1000 = 32,100 TWD (about $1,070)

Buying one lot of TSMC in the US (1000 shares): 95 × 1000 = $95,000

It seems that buying in the US costs more? But in reality, investors usually do not buy 1000 shares at once.

Buying just 1 share of TSMC in the US: 95 × 1 = $95 (about 3,000 TWD)

This is the key difference. The minimum trading unit in the US is one share, while in Taiwan, the minimum is one lot (1000 shares). Therefore, the entry barrier is completely different.

Taiwan Stock’s Whole Lot Trading vs. Odd-Lot Trading

Because one lot of 1000 shares is too expensive for retail investors, Taiwan’s stock market has developed two trading methods to address this issue.

Whole Lot Trading

• Minimum trading unit: 1 lot (1000 shares)
• Trading hours: 09:00-13:30 during the day, 14:00-14:30 after hours
• Matching method: Continuous trading, immediate execution
• Advantages: High liquidity, quick transactions
• Disadvantages: High capital threshold, difficult for retail investors to afford

Odd-Lot Trading

• Minimum trading unit: 1 share
• Trading hours: 09:00-13:30 during the day, 13:40-14:30 after hours
• Matching method: Call auction, matched once every minute
• Advantages: Low capital threshold, easy to enter
• Disadvantages: Lower liquidity, may be harder to execute

For investors with limited funds wanting to enter Taiwan’s stock market, odd-lot trading indeed lowers the barrier, but the liquidity is not as good as whole lot trading.

Complete Comparison of US Stocks and Taiwan Stocks

Practical Example: Understanding Stock Price Changes

Tesla (TSLA) case

On January 6, 2023, Tesla’s stock price was $101.81. An investor buying one share needed $101.81. By August 2, 2023, the stock rose to $254.11, so buying the same share now costs $254.11. In less than seven months, the stock appreciated by over 150%.

This explains why many investors pay close attention to stock price movements—because the same stock’s price can double due to company performance and market expectations.

Taiwan stock comparison

If, at that time, you used the same funds to buy TSMC in Taiwan, you would need to buy 1000 shares at once, which would cost much more. This also explains why many retail investors prefer odd-lot trading rather than investing tens of thousands of dollars to buy one lot.

Three Major Factors Affecting Stock Prices

Whether in the US or Taiwan, stock prices are not decided out of thin air; they are mainly influenced by three aspects:

1. Company Fundamentals

The company’s financial health, profitability, and growth prospects are fundamental in determining stock prices. A company with continuous growth and strong financial reports will be favored by investors, pushing the price up. Conversely, poor performance will lead to selling.

2. Macroeconomic Environment

Indicators like GDP, interest rates, and unemployment rate affect the overall market performance. During economic booms, stocks rise; during recessions, stocks fall.

3. Market Sentiment

Investor psychology and expectations are equally important. Even if the company’s fundamentals remain unchanged, positive news can push stock prices higher, while political turmoil or global events (like pandemics) can trigger panic selling, causing sharp declines.

Summary: Choose the Trading Method That Suits You

Now you should understand why US stocks seem cheap while Taiwan stocks appear expensive. The key difference lies in the trading units—US stocks are traded per share, while Taiwan stocks are traded in lots (1000 shares).

• If you have sufficient funds and prioritize liquidity, whole lot trading in Taiwan is the best choice.
• If your funds are limited but you want to participate in Taiwan stocks, odd-lot trading offers flexibility.
• If you prefer a low entry barrier and global investment, US stocks are a good option.

Once you understand how many shares make up one stock and how stock prices are calculated, you can make smarter choices across different markets.