Must-read before investing: How much does one share of Taiwanese stock actually cost?

Many novice investors in the stock market have had this question—why is it that buying stocks in Taiwan often costs hundreds of thousands of NT dollars, while in the US stock market, you can start with just a few thousand dollars? Behind this huge difference are two completely different trading mechanisms in the markets.

From Actual Purchase Costs: How much is one share of Taiwan Stock?

Let’s understand this in the most straightforward way. When you see TSMC’s stock price at 561 NT dollars, this number represents the price of one share, not a lot. So, how much does one lot of stock cost?

Simple math: 561 × 1000 = 561,000 NT dollars

That’s right. To buy one lot of TSMC in Taiwan, you need about 560,000 NT dollars in capital. This is why most retail investors cannot afford to trade in “whole lots” (which require buying one lot or its multiples).

The concepts of stock price, face value, and one share—three easily confused terms

Before explaining how much one lot of stock costs, we need to clarify the basic units in the stock market.

What is stock price? The stock price is the real-time transaction price you see during trading, representing the latest agreed-upon transaction price between buyers and sellers in the market. For example, as of August 2, 2023, Tesla (TSLA) stock was priced at $254.110—this was the purchase price for one share of Tesla at that time. In January of the same year, one Tesla share was only $101.81, and within just 7 months, the stock price increased by over 150%.

What is face value? Face value is the initial amount set by the company at its founding, mainly used to record shareholders’ capital contributions. In Taiwan, due to a historical fixed face value system, most listed companies’ stock face value is 10 NT dollars, but this has no direct relation to the stock price. A company’s stock price can be much higher than its face value or lower; the actual stock price is determined by the company’s profitability and investor expectations.

What is one share? One share is the basic unit of stock trading. For investors, to determine how much one share costs, simply check the current market price. For example, as of April 30, 2024, Taiwan Cement (1101.TW) was trading at 32.10 NT dollars, which is the price of one share of Taiwan Cement at that time.

The reality of trading in Taiwan stocks: why is there a “lot” unit?

In the US stock market, the unit of buying and selling stocks is one share. But Taiwan stocks are different—the standard trading unit is one lot (1000 shares).

This means that if you want to trade in whole lots (to get the best liquidity and fastest execution), the minimum investment is the cost of 1000 shares. Some high-priced stocks (like TSMC) require investors to make a one-time investment of tens of thousands or even hundreds of thousands of NT dollars.

Because of this high threshold, Taiwan’s market introduced a “partial lot” trading system—allowing investors to buy and sell less than 1000 shares (1~999 shares). The benefit of partial lot trading is lowering the entry barrier, but the trade-offs include lower liquidity, limited trading hours, and transactions executed via call auction rather than continuous trading.

US vs Taiwan stocks: the same company, vastly different purchase costs

Taking TSMC as an example, this company is listed both in Taiwan and the US.

• In Taiwan: one share costs 561 NT dollars, and one lot (1000 shares) costs 561,000 NT dollars.
• In the US: one share costs $95, which is only about 95 USD (roughly 3,000 NT dollars).

This huge difference is entirely due to the different trading units. The US market trades in one share units, while the Taiwan market trades in one lot (1000 shares).

Other key differences between the two markets include:

The real drivers of stock price fluctuations

Now that you understand how the cost of one lot of stock is calculated, you might wonder why stock prices go up and down.

The main factors influencing stock prices include three categories:

Company fundamentals: A company’s financial health, revenue, profits, and future prospects are the core support for stock prices. Strong financial reports attract investors to buy, pushing prices higher; poor performance triggers selling.

Macro-economic environment: Indicators like GDP, interest rates, inflation, employment data influence overall market performance and investor risk appetite. When the economy improves, stocks tend to rise; during economic downturns, stocks often decline.

Market sentiment: Investor psychology and expectations are equally important. Negative news, political instability, global crises (like pandemics) can trigger panic selling; optimistic outlooks promote buying.

Understanding these factors is also crucial for judging whether the price of one lot of stock is worth buying—cheap prices are not always good opportunities, and expensive stocks may still be high-quality assets.