How much does one share of Taiwan stock actually cost? Why is there such a big price difference between US stocks and Taiwan stocks?

Many novice investors in the stock market will notice an interesting phenomenon: trading entire shares in the Taiwan stock market (TWSE) tends to be particularly expensive, while in the US stock market (NYSE/NASDAQ), it is relatively more affordable. The fundamental reason for this difference is not the company’s value, but rather the completely different settings of trading units in the two markets. To truly understand this, we need to clarify the two basic concepts in stock trading: “one share” and “one lot.”

Differences in Trading Unit Design Across Markets

Stock markets worldwide do not adopt a unified standard for trading units. In the US, the basic trading unit is “one share,” whereas in Taiwan, a “lot” (一張) is introduced as a larger unit. This design choice directly impacts the entry barrier for investors.

In Taiwan’s stock market, 1 lot equals 1,000 shares. In other words, to trade a full lot (or multiples thereof), investors need to buy 1,000 shares at once. In contrast, US investors can purchase stocks share by share, with the minimum being 1 share, making the entry threshold much lower.

Stock Price and Face Value: Two Easily Confused Concepts

Before calculating transaction costs further, we need to distinguish between “stock price” and “face value,” two concepts often confused.

Stock price refers to the real-time trading price of a stock in the market, representing the amount an investor pays or receives to buy or sell one share at that moment. Stock prices fluctuate in real-time based on market matching between buyers and sellers, reflecting the market’s valuation of the company’s current worth.

Face value, on the other hand, is the nominal value recorded on the stock certificate, used to document the initial capital contribution per share when the company was founded. In Taiwan, due to a historically implemented fixed face value system, most listed companies’ stock face value is NT$10. However, face value and stock price are not necessarily related — face value is just a historical record, while stock price is determined by market factors such as profitability, growth potential, and investor expectations.

How to Calculate the Cost of Buying One Lot in Taiwan

With an understanding of trading units, calculating the cost of one stock lot becomes straightforward.

Suppose a certain Taiwanese stock’s current price is NT$32.10. To buy a full lot, the investor needs to pay: NT$32.10 × 1000 = NT$32,100. This is the principal amount needed to purchase one lot.

For example, TSMC (stock code 2330) has a stock price of NT$561. Buying a full lot would require: NT$561 × 1000 = NT$561,000, which is a huge sum for most retail investors.

How Zero-Share Trading Lowers Investment Barriers

To enable small and medium investors to participate in the stock market, Taiwan’s market offers a “zero-share trading” mechanism. Zero-share trading refers to buying less than one full lot (i.e., from 1 to 999 shares). Through zero-share trading, investors can purchase TSMC stock with far less capital than NT$561,000.

Zero-share trading differs from full-lot trading in several aspects:

Due to the relatively lower liquidity of zero-share trading, the market generally recommends investors prioritize full-lot trading when conditions permit.

How the US Stock Market Operates

The US stock market employs a completely different trading structure. In the US, the minimum trading unit is one share; there is no concept of “one lot.” This means investors can buy US stocks with comparatively less capital.

For example, Tesla (TSLA) has a stock price of USD 254.11. An investor can purchase just one share for USD 254.11. Buying 100 shares would cost only USD 25,411. Compared to the NT$561,000 required for a full lot in Taiwan, the US market is clearly more accessible.

Comparing TSMC’s Cross-Market Trading Costs

TSMC is listed both in Taiwan and the US, providing an excellent comparison case.

In Taiwan’s market (stock code 2330), TSMC’s stock price is about NT$561, requiring NT$561,000 to buy one lot.

In the US market (stock code TSM), the same company’s stock price is about USD 95, and buying one lot (which in US terms is just one share) costs only USD 95, roughly NT$3,000.

This huge price difference mainly stems from the different trading unit settings, not from the company’s intrinsic value.

Core Trading Differences Between US and Taiwan Markets

The difference in trading units creates a huge gap in capital thresholds. The US allows smaller investments, while full-lot trading in Taiwan requires a larger initial capital.

Factors Driving Stock Price Fluctuations

Whether in the US or Taiwan, the price of a single share is not static. Market fluctuations are mainly influenced by the following three factors:

Fundamental factors — a company’s financial health, profitability, and growth prospects are core determinants of its long-term value. Investors analyze financial reports carefully; companies with strong performance tend to attract more buying, pushing up the stock price.

Macroeconomic environment — indicators such as GDP growth, interest rate changes, and inflation levels influence the overall market trend. When the economy is strong, stocks tend to rise; during recessions, the market faces downward pressure.

Market sentiment and expectations — investor psychology and emotional reactions are also key drivers. Negative news, political instability, or global shocks (like pandemics) can trigger panic selling, causing sharp declines. Conversely, optimistic sentiment can boost prices.

For example, Tesla’s stock price on January 6, 2023, was USD 101.81, rising to USD 254.11 by August 2, a gain of over 150% in just seven months. This volatility reflects changing market expectations about the company’s prospects and the development of the electric vehicle industry.

Summary

Understanding the basic units and valuation methods in stock trading is crucial for investment decisions. Taiwan’s use of a lot (1000 shares) as the trading unit results in a much higher capital threshold for full-lot trading compared to the US. However, Taiwan also offers flexible options like zero-share trading, allowing investors with less capital to participate. The US market’s one-share trading unit makes it easier for small and medium investors to enter.

Regardless of the market chosen, investors should develop a reasonable investment plan based on their capital, risk tolerance, and goals. Continuously monitoring company fundamentals, macroeconomic conditions, and market sentiment will help make more informed decisions in the stock market.