Why are US stocks cheap and Taiwan stocks expensive? Understanding stock units and share prices is the key.

Many newcomers to the stock market have a question: why does it cost only a few tens of US dollars to buy one share of the same company in the US stock market, while in the Taiwan stock market it costs several hundred New Taiwan Dollars? The core difference behind this lies in the completely different definitions of stock units across markets.

Stock Price Does Not Equal Stock Unit: Understanding Two Pricing Logics in the Market

First, clarify a concept: the stock price only represents the transaction price of one share, not the minimum unit you need to purchase.

The definition of stock price is simple—it is the trading price of a stock in the market, determined by real-time matching between buyers and sellers. This price fluctuates constantly with supply and demand. For example, as of August 2023, Tesla (TSLA) is quoted at $254.11 per share; at the same time, TSMC (2330.TW) is quoted at 561 New Taiwan Dollars per share. These numbers only tell you how much one share is worth, not the actual trading unit you buy.

This is why trading units become a key factor influencing trading costs.

Taiwan Stock vs US Stock: The Big Difference in “Lot” and “Share” Trading Logic

In Taiwan’s stock market, the trading unit is called a “lot,” 1 lot equals 1000 shares. This means buying one lot in Taiwan stock market is equivalent to purchasing 1000 shares at once.

In contrast, the US stock market has no concept of “lot”; the trading unit is simply “share,” and investors can buy 1 share, 10 shares, or any amount.

This difference directly affects the entry threshold. Take TSMC as an example:

• Buying a full lot (1 lot) in Taiwan: 561 × 1000 = 561,000 New Taiwan Dollars (about 560,000)
• Buying 1 share in the US: $95 (about 3,000 New Taiwan Dollars)

The same company, but the transaction costs differ by hundreds of times. This explains why retail investors generally feel that Taiwan stocks are “expensive,” while US stocks are “cheap.”

Stock Par Value vs Market Price: Don’t Confuse These Two Concepts

When discussing stock units, many people confuse “par value” with “market price.”

Stock par value is the face value set when the company issues shares, used to record the original capital contribution of shareholders. In Taiwan, a fixed par value system was historically used, with most listed companies’ stock par value set at 10 NT dollars. For example, if a company’s capital is 10 million NT dollars divided into 1 million shares, each share’s par value is 10 NT dollars.

However, par value and market price are not necessarily related. Market price is determined by the company’s profitability, growth prospects, and investor expectations. A well-managed, high-growth company’s stock price can far exceed its par value. For instance, Tesla’s price was $101.81 at the beginning of 2023, rising to $254.11 by August—a gain of over 150% in just 7 months. Such increases are entirely driven by market optimism about its future.

Understanding the “Full Share” and “Odd Lot” Trading Mechanisms in Taiwan Stocks

Because buying a full lot of TSMC costs 560,000 NT dollars, most retail investors cannot afford it. To lower the entry barrier, Taiwan stock market introduced odd lot trading.

Full lot trading is the traditional method, with the minimum unit being 1 lot (1000 shares). During trading hours (9:00-13:30), transactions are executed on a per-transaction basis, taking effect immediately; after hours (14:00-14:30), a call auction is used. Full lot trading offers high liquidity but requires a large capital.

Odd lot trading involves buying or selling less than 1 full lot (1-999 shares). During trading hours, the same 9:00-13:30 window applies, but after hours, trading occurs from 13:40-14:30. Odd lot matching is done via a call auction, matched once per minute. This type of trading has lower liquidity but allows ordinary investors to participate with less capital.

Global Stock Markets’ Trading Units Are Not Uniform

The absence of “lot” in US stocks reflects different market understandings of liquidity and accessibility. US stocks are designed to allow ordinary investors to easily buy 1 share of Apple or Tesla without difficulty. The “lot” concept in Taiwan is more rooted in historical development and institutional design.

This is why, when comparing Taiwan stocks and US stocks, these differences emerge:

What Factors Determine the Final Market Price of a Stock?

The unit of stock determines how many shares you buy at once, while the stock price is set by market forces.

The company’s fundamentals are the primary factor. Financial reports, profitability, market position, product competitiveness—all are evaluated by investors. Companies with strong performance and growth potential attract capital, pushing their stock prices higher.

Macroeconomic environment also plays a significant role. GDP growth, interest rate policies, inflation data, employment figures—all influence market risk appetite. When the economy is strong, risk assets are favored; during downturns, investors tend to seek safety.

Market sentiment is often underestimated. Negative news, geopolitical risks, global events (like pandemics) can trigger panic selling in a short time. Conversely, optimistic expectations and positive news can quickly boost stock prices.

By understanding these factors, you can grasp the core of stock investment—the trading unit determines your entry cost, while market fundamentals, macro cycles, and sentiment decide the potential for price appreciation.