Why does buying Taiwan stocks cost so much? The truth about the difference of one share per lot

Many people new to the stock market share the same confusion: why can you buy just a few shares of US stocks freely, but in Taiwan stocks, you need to spend a lot of money? The answer to this question is actually very simple—the trading units are different.

What is the difference in trading units between Taiwan stocks and US stocks

This is the most fundamental distinction. The trading unit for US stocks is “one share,” while in Taiwan stocks, the trading unit is “one lot,” and 1 lot equals 1000 shares.

A real-world example can clearly show how big the difference is. Suppose TSMC’s stock price in Taiwan is NT$561 per share. To buy one lot in Taiwan, you need to spend 561 × 1000 = NT$561,000, about 560,000 NT dollars. But the same TSMC stock listed in the US (ticker TSM) is about US$95 per share. Buying one share costs only US$95, which is less than NT$3,000.

The same company, the cost of one unit differs by 200 times. This is why many people think US stocks are cheap and Taiwan stocks are expensive—it’s not that the stock prices are high, but that the minimum trading unit costs are completely different.

How is the basic stock price determined

Before understanding why the difference is so big, let’s clarify how stock prices are formed.

The stock price is the market transaction price of one share, and it does not equal the face value. This is a common confusion for beginners. For example, in Taiwan, early regulations set the face value of stocks at NT$10. This NT$10 is just a record of the company’s initial capital contribution, and has nothing to do with the current stock price. A stock with a NT$10 face value does not mean that one share is only worth NT$10 now; the actual stock price is determined by the company’s profitability and investor expectations.

Take TSMC as an example: its face value is NT$10, but the stock price can rise to over NT$500. This is because the market is optimistic about its development. Stock prices fluctuate in real-time through the matching of buy and sell orders. From 9:00 AM to 1:30 PM during Taiwan stock market trading hours, the stock price constantly changes based on supply and demand.

How much is one lot, and how to calculate it

Once you know the stock price per share, calculating the price of one lot is very straightforward:

Price of one lot = stock price per share × 1000

For example, if a stock is currently NT$50 per share, then one lot costs NT$50,000. To buy one lot, you need to prepare NT$50,000.

But this creates a problem—for most retail investors, one lot is too expensive. So Taiwan stocks later introduced “odd lot trading,” allowing investors to buy from 1 to 999 shares, without needing to buy a full lot.

Both odd lot and full lot trading have their advantages and disadvantages. Full lots have higher liquidity and faster transactions, but require a higher capital threshold; odd lots have lower barriers and allow small investments, but their trading involves periodic auction matching every minute, resulting in relatively lower liquidity. If your funds are sufficient, it is recommended to trade full lots for more assured transactions.

The differences in the entire trading systems between US stocks and Taiwan stocks

Besides the trading units, there are other differences between the two markets:

Trading hours: During daylight saving time, US stock trading hours are 9:30 PM to 4:00 AM Taiwan time; during standard time, it’s 10:30 PM to 5:00 AM. Taiwan stocks trade during traditional working hours, from 9:00 AM to 1:30 PM.

Price fluctuation limits: In the US, a 10% increase or decrease is considered normal; exceeding that triggers a circuit breaker. Taiwan stocks have no daily price fluctuation limit historically.

Trading costs: Most US brokers now offer zero commission trading; in Taiwan, the commission fee is usually around 0.1425%.

Trading methods: US stocks are traded share by share, settled immediately; Taiwan stocks are traded in full lots with each transaction, while odd lots are matched periodically through auction.

What ultimately determines stock prices

After understanding how to calculate, investors also need to understand why stock prices go up or down. There are three main factors:

First is the company’s fundamentals. Strong financial reports, profit growth, and competitive products attract investors to buy, pushing the stock price up; the opposite is also true.

Second is macroeconomic factors. Interest rates, inflation, GDP growth, industry cycles—these macro factors influence the overall market direction and investors’ risk appetite.

Finally is market sentiment. Investors’ optimism or panic often amplifies short-term volatility. Negative news, geopolitical risks, or global economic crises can instantly change market sentiment.

Summary

The trading logic of Taiwan stocks and US stocks is actually the same: market supply and demand determine stock prices, and the stock price multiplied by the trading unit determines the investment cost. The only difference is in the design of trading rules—Taiwan uses one lot (1000 shares) as the basic unit, while US stocks use one share. Once you understand this, you won’t be fooled by the illusion of “why Taiwan stocks are so expensive.”