Why is there such a big price difference for the same stock? What's the difference between one share and one lot?

Many novice investors in the stock market often feel confused: why are US stocks so cheap to buy, while Taiwanese stocks often start at tens of thousands of NT dollars? Actually, the root of this phenomenon is not the intrinsic value of the stocks themselves, but the difference in trading unit settings. US stocks are traded in units of one share, while Taiwanese stocks are traded in lots (1000 shares) as the minimum whole lot. Today, let’s delve into the core rules of stock trading and learn how to correctly calculate the cost of stock prices converted to TWD.

Stock Trading Units Determine Your Entry Cost

The biggest difference between US stocks and Taiwanese stocks lies in the trading units. US investors can buy stocks at the price of a single share, whereas Taiwanese stocks require purchasing a whole lot (1000 shares). What does this mean?

Using real examples makes it clearer. TSMC is listed both in Taiwan and the US. In Taiwan (stock code 2330), the stock price is 561 NTD; in the US (code TSM), it’s 95 USD.

If you want to buy TSMC in Taiwan:

• Minimum needed: 561 × 1000 = 561,000 NTD (about 560,000 NT dollars)

If you want to buy TSMC in the US:

• Only need: 95 × 1 = 95 USD (about 3,000 NTD)

The same company’s stock, but the entry threshold differs by nearly 200 times! That’s why many Taiwanese retail investors feel that Taiwanese stocks are “unaffordable.”

Understanding “Stock Price” and “One Share” to Calculate Costs Correctly

What is a stock price?

The stock price refers to the transaction price of a stock in the market, representing how much money an investor needs to pay to own that stock, or at what price they can sell it. The stock price fluctuates in real-time based on the latest matched trades between buyers and sellers. Different countries’ stocks use different currency units—US stocks in USD, Taiwanese stocks in TWD.

How much is one share? How to read it?

The stock price simply indicates the “price per share.” For investors, to see how much one share costs, just look at the current market price—no complicated calculations needed.

For example, on August 2, 2023, Tesla (TSLA) stock was priced at 254.110 USD, meaning one share of Tesla at that time cost 254.110 USD. On January 6 of the same year, one Tesla share was only 101.81 USD. In less than 7 months, the stock price increased by over 150%.

Similarly, in Taiwan, on April 30, 2024, Taiwan Cement (1101.TW) was priced at 32.10 NTD per share, which is the amount needed to buy one share of Taiwan Cement at that time.

It’s important to note that par value and stock price are not necessarily related. Par value (usually 10 NTD) is just a record of the original shareholder’s capital contribution, while the stock price is determined by the company’s profitability, market expectations, and other factors. As long as investors are optimistic about the company’s development, the stock price will keep rising.

The Unique “Lot” Concept in Taiwanese Stocks: 1 lot = 1000 shares

In the Taiwanese stock market, there are two trading units: “one lot” and “one share,” but in the US stock market, only “one share” exists—there is no concept of “one lot.”

1 lot equals 1000 shares. In other words, buying one lot of stocks in Taiwan is equivalent to purchasing 1000 shares at once.

How to calculate the cost of one lot of stocks?

Since you know the stock price per share, calculating the cost of one lot is straightforward. Suppose a stock’s price is 561 NTD:

Cost of one lot = 561 × 1000 = 561,000 NTD

This explains why ordinary retail investors find it difficult to buy high-priced stocks like TSMC in whole lots. To address this, the Taiwanese market introduced “whole share trading” and “odd lot trading” modes.

Whole Share Trading vs Odd Lot Trading

Whole Share Trading: Buying one lot or its multiples

• Minimum trading unit: 1 lot (1000 shares)
• Trading hours: 09:00-13:30 during the day, 14:00-14:30 after hours
• Matching method: Continuous trading, immediate execution
• Advantages: High liquidity, fast transactions
• Disadvantages: High capital requirement, difficult for retail investors to participate

Odd Lot Trading: Buying less than one lot (1–999 shares)

• Minimum trading unit: 1 share
• Trading hours: 09:00-13:30 during the day, 13:40-14:30 after hours
• Matching method: Call auction, matched every minute
• Advantages: Lower capital threshold, entry with around 1,000 NTD
• Disadvantages: Lower liquidity, longer transaction times

For most retail investors with limited funds, odd lot trading offers a chance to participate in the stock market, but they need to accept the trade-off of lower liquidity.

Comparing US and Taiwanese Stock Trading Rules

Three Major Factors Affecting Stock Prices

After understanding how stock prices are calculated, it’s also important to know why stock prices fluctuate. The main factors influencing stock prices are three:

1. Company Fundamentals

A company’s financial health, profitability, and growth prospects determine its intrinsic value. Strong performance and impressive financial reports attract investors, pushing stock prices up; poor performance leads to declines.

2. Macroeconomic Environment

Indicators like GDP, interest rates, inflation, and unemployment rates influence the overall stock market. During economic booms, investor confidence is high, and markets rise; during recessions, cautiousness prevails, and markets fall.

3. Market Sentiment

Investor psychology and expectations are equally important. Negative news, geopolitical risks, global economic events (like pandemics) can trigger panic selling, causing sharp declines. Conversely, positive news can generate optimism and buying waves.

Start Your Investment Journey

Now that you understand how stock prices are calculated, the difference between one share and one lot, and why US and Taiwanese stocks differ so much, the next step is to choose an investment method suitable for your capital situation. If funds are limited, odd lot trading in Taiwan is a good entry point; if you want more liquidity and lower entry costs, trading individual US stocks is also worth considering. Whichever path you choose, building a solid foundation of knowledge is the first step to successful investing.