How many shares are in one US stock? Unveiling the secrets of stock trading units

Market “Illusions” Caused by Differences in Trading Units

Investors are often curious: why do US stocks seem so cheap to trade, while Taiwanese stocks are relatively expensive? Many mistakenly think it’s due to differences in stock prices themselves, but the real reason lies in the fact that the two markets use completely different trading units. How many shares in a lot of US stocks? Simply put, US stocks have no “lot” concept—only “shares” as the trading unit, which is the key factor leading to differences in trading costs between the two markets.

What are Stock Price and a Share?

The Nature of Stock Price

The stock price represents how much money an investor needs to pay at a specific moment to buy or sell one share of stock. It is not fixed; it fluctuates in real-time based on the latest transaction prices between buyers and sellers in the market. In different countries’ stock markets, the unit of stock price also varies—US stocks are priced in USD, while Taiwanese stocks are priced in TWD.

For example, in 2024, TSMC’s stock price in Taiwan is 561 TWD, and Tesla’s price in August 2023 was $254.110 USD. These numbers represent the transaction price for one share.

The Meaning of a Share

For listed companies, “a share” is the basic unit of stock, representing a portion of ownership in the company. For example, if a company’s capital is 10 million TWD divided into 1 million shares, each share has a par value of 10 TWD. It is important to note that the par value of a stock and its current market price are not necessarily related—par value merely records the original capital contribution of shareholders, while the stock price is determined by the company’s profitability and investor expectations.

Therefore, investors only need to look at the current market price to judge the price of a share. The same stock can have very different prices at different times—Tesla’s price was $101.81 USD on January 6, 2023, and rose to $254.11 USD by August 2, 2023, nearly 1.5 times in just seven months.

The Truth About “One Lot” in Taiwanese Stocks

How many shares are in one lot?

In the Taiwanese stock market, one lot equals 1,000 shares, which is a unique trading unit in Taiwan. Unlike US stocks, which are traded directly in units of one share, Taiwanese stocks bundle 1,000 shares into “one lot.” This results in completely different entry costs between the two markets.

Calculating the Price of One Lot

Since one lot equals 1,000 shares, the calculation is straightforward. If TSMC’s stock price is 561 TWD, then purchasing one lot of TSMC requires:

561 TWD × 1,000 shares = 561,000 TWD

This is roughly 560,000 TWD in capital, which is a significant expense for most retail investors.

Trading Whole Shares vs Fractional Shares

To lower the barrier to entry for investors, Taiwanese stocks introduced fractional trading. Fractional trading refers to buying and selling less than one lot (i.e., 1–999 shares).

Whole lot trading: The minimum unit is 1 lot, with trading hours from 9:00 to 13:30 during the day session, and 14:00 to 14:30 after hours. It uses a continuous trading method, with immediate execution, high liquidity, but a high capital requirement.

Fractional trading: The minimum unit is 1 share, with trading hours from 9:00 to 13:30 during the day session, and 13:40 to 14:30 after hours. It uses a call auction mode, matched once per minute, with lower capital requirements but less liquidity.

Differences Between US and Taiwanese Stock Trading

The Fundamental Difference in Trading Units

US stock trading units are 1 share, while Taiwanese stock trading units are 1 lot (1,000 shares). This difference is the core reason behind the question “How many shares in a lot of US stocks”—US stocks simply do not have the concept of “lots.”

Actual Cost Comparison

Taking TSMC as an example, the trading costs for the same company differ vastly between the two markets:

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

Investors need nearly 19 times more capital in Taiwan to buy an equivalent amount of shares.

Other Trading Differences

The two markets also differ in transaction fees, daily price limits, trading hours, and more. US stock trading fees are generally very low (often zero), with no daily price limits, and regular trading hours from 21:30 to 4:00 Beijing time (Daylight Saving Time) or 22:30 to 5:00 (Standard Time). Taiwanese stocks have a transaction fee of 0.1425%, no daily price limits, and trading hours from 9:00 to 13:30.

Core Factors Influencing Stock Price Fluctuations

Company Fundamentals

Financial health, profitability, and long-term prospects are fundamental in determining stock prices. Companies with strong performance attract large buy-in from investors, pushing up the stock price.

Macroeconomic Environment

GDP growth, interest rate changes, exchange rate fluctuations, inflation, and other macroeconomic indicators influence overall stock market performance and, consequently, individual stock prices.

Market Sentiment and Expectations

Investor sentiment often amplifies market reactions. Good news triggers buying waves, bad news causes panic selling, and political instability or major global events (like pandemics) can cause market volatility.

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