Must-read before buying stocks | How much is one share? The pricing logic of Taiwan stocks and US stocks is very different

The most common confusion in the stock market is: Why does buying one lot of Taiwanese stocks cost hundreds of thousands, while US stocks only cost a few thousand? How is the price per share calculated? Actually, the answer to this question lies in the three words “trading units.”

Quick Comparison｜Pricing Differences Between Taiwan Stocks and US Stocks

Let’s first look at the core difference:

Taiwan stocks have a trading unit of 1 lot = 1000 shares, whereas US stocks are traded directly per share. What does this lead to?

Taking TSMC as an example:

• Buying one lot of Taiwan stocks (2330): stock price NT$561 × 1000 shares = NT$560,000
• Buying one share of US stocks (TSM): stock price US$95 × 1 share = about NT$3,000

The same company, but the transaction cost differs by a factor of 20. That’s why many people think Taiwan stocks are “expensive” and US stocks are “cheap.”

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

Many people confuse “par value” and “stock price,” but they are two different things:

Par value is just a historical record, representing the price set when the company initially issued the stock. Most Taiwanese stocks have a par value of NT$10, but this has little impact on the current stock price.

Stock price is what you really need to pay attention to; it represents how much investors are willing to pay for one share at the moment. Stock prices fluctuate in real-time based on the company’s profitability, market expectations, and investor sentiment.

How to see how much one share costs?

Simply check the “current market price” on your trading software.

For example: On April 30, 2024, Taiwan Cement (1101.TW) shows a stock price of NT$32.10, which means one share of Taiwan Cement was worth NT$32.10 at that time.

Similarly, Tesla (TSLA) in US stocks at a certain moment is priced at US$254.11, indicating one share of Tesla at that time costs US$254.11.

It’s worth noting that Tesla was only US$101.81 per share at the beginning of 2023, rising to US$254.11 by August. In less than 7 months, the stock price doubled, reflecting real-time market expectations.

Unique to Taiwan Stocks｜What exactly is a “lot”?

The concept of a “lot” in Taiwan stocks is quite special. One lot equals 1000 shares, which is the standard trading volume in Taiwan.

But this creates a problem: ordinary retail investors often cannot afford to buy a full lot.

If TSMC’s stock price is NT$561, buying one lot costs NT$561 × 1000 = NT$560,000. That’s too high for most investors.

Therefore, Taiwan stocks offer two trading methods: “Full lots” and “Odd lots”:

• Full lot trading: starting at 1 lot (1000 shares), high capital requirement but high liquidity
• Odd lot trading: buying 1–999 shares, lower capital requirement but less liquidity and slower matching

Detailed comparison of the two:

US Stocks vs Taiwan Stocks｜Comprehensive Trading Rules Comparison

Besides trading units and initial costs, there are many other differences:

US stocks have lower trading costs and higher liquidity, but require understanding English and US time zones; Taiwan stocks have higher entry barriers but trading hours align with Taiwan working hours.

What determines the price of one share?

Stock prices are not fixed; they change every second. The main factors influencing them are three:

1. Company fundamentals
Profitability, financial health, and growth potential directly impact stock prices. Companies with strong performance attract buyers, pushing prices higher.

2. Overall economic environment
Interest rates, exchange rates, inflation, GDP, and macroeconomic factors influence investors’ risk appetite and buying decisions. When the economy is good, investors tend to buy; during downturns, they may sell.

3. Market sentiment
Optimistic or pessimistic investor sentiment can drive stock prices in the short term more than fundamentals. Negative news, geopolitical risks, and black swan events can trigger panic selling.

Understanding these factors can help you better judge when to buy or sell.