Must-Know Before Investing: How much is one share of stock, and the key differences between the US and Taiwan markets

Why is there such a big price difference for the same stock across different markets?

Many novice investors will notice an interesting phenomenon: trading US stocks seems “much cheaper,” while Taiwanese stocks appear “more expensive.” But this is not because the stocks themselves are inherently costly or cheap; rather, it stems from differences in trading mechanisms across markets. To truly understand how markets operate, first grasp the most basic concept: how much does one share of stock cost.

How is stock price determined? Understanding the market pricing mechanism

Stock price refers to the transaction price of a stock in the market, reflecting the amount investors are willing to pay at a specific moment. Under the influence of trading centers, stock prices fluctuate continuously based on bid and ask quotes.

For example, TSMC’s stock price at NT$561 indicates the current market transaction price per share. Similarly, Tesla’s stock price at $254.110 USD is the trading price for one share at that moment.

It’s important to note that different countries’ stock markets use different currencies for pricing—US stocks are quoted in USD, while Taiwan stocks are quoted in TWD.

Deep dive: What does one share of stock truly mean?

Is one share the minimum trading unit?

Not all markets are the same. In the US, one share is the basic trading unit, and investors can buy individual shares directly. But in the Taiwanese market, the situation is more complex.

Taiwan stock trading uses two levels: “one lot” and “one share.” Among them, 1 lot equals 1000 shares. That means, when you trade “full lots” (regular trading), the minimum unit is 1 lot, requiring you to buy or sell 1000 shares at a time.

Face value vs. stock price: don’t get them mixed up

Investors often confuse face value and stock price. Face value is the nominal value set when the company issues stocks—Taiwan used to have a fixed face value system, with most listed companies’ stocks having a face value of NT$10. But the stock price is what you actually pay, determined by the company’s profitability and market expectations.

For example, if a company has a capital of NT$10 million divided into 1 million shares, each share’s face value is NT$10. But if the company performs well later and investors are optimistic about its prospects, the stock price might rise to hundreds of NT$, completely detached from face value.

How to check how much one share costs?

The simplest way is to look up the current market price. For example, Tesla’s stock price on January 6, 2023, was $101.81 USD, and by August 2, it had risen to $254.11 USD—more than 1.5 times in just seven months. In Taiwan, you can check real-time quotes, such as Taiwan Cement (1101.TW), which might show a price of NT$32.10.

Unique to Taiwan: the calculation logic of one lot’s stock price

Since the minimum trading unit in Taiwan is 1 lot (1000 shares), the price of one lot equals the stock price per share multiplied by 1000.

For example, if TSMC’s stock price is NT$561, then buying one lot of TSMC requires: NT$561 × 1000 = NT$561,000

This means that an average retail investor needs at least NT$561,000 to buy a full lot of TSMC. For most small investors, this threshold is quite high.

The emergence of fractional share trading: lowering entry costs

To address the high entry barrier, Taiwan introduced fractional share trading—buying and selling less than one full lot (1–999 shares). While fractional trading reduces capital requirements, liquidity is relatively lower, and transaction speed is slower compared to full lots.

Below are the core differences between full lot and fractional share trading:

US stocks vs. Taiwan stocks: a comprehensive comparison of trading systems

The core reason for the differences between the two markets lies in different trading units. US stocks are based on a single share as the trading unit, while Taiwan stocks use one lot (1000 shares). This directly results in vastly different entry barriers.

Taking TSMC as an example of dual listing:

• Taiwan stock code 2330, stock price NT$561, full lot purchase requires NT$561,000 (about US$18,000)
• US stock code TSM, stock price $95, only $95 to buy one share

The difference can even exceed 100 times.

Other major differences between the two markets include:

The deeper factors influencing how much one share costs

Stock prices are not decided arbitrarily but are the result of multiple forces:

The decisive role of company fundamentals

Financial statements, profitability, growth prospects, and other fundamental indicators directly influence investors’ valuation of the company. Steady performance and promising outlooks attract capital inflows, pushing up stock prices; conversely, poor performance drags prices down.

The ongoing impact of macroeconomic environment

Indicators like GDP growth, interest rate policies, and unemployment rates alter investor expectations about the overall economy, which in turn affects the stock market. When the economy is strong, stocks tend to perform well; during recessions, markets may enter bear territory.

Short-term market sentiment drivers

Investor psychology and expectations often drive stock prices more than rational analysis in the short term. Good news, political stability, or resolution of global risks can quickly change market sentiment and cause sharp price swings. Conversely, negative news or sudden events can trigger panic and lead to rapid declines.

Conclusion

Mastering the basic concept of how much one share costs is an essential preparation before investing. Understanding the differences in trading units between US and Taiwan markets can help you better evaluate entry costs and develop appropriate investment strategies. Regardless of which market you choose, understanding the pricing mechanism and influencing factors is the first step to becoming a savvy investor.