How much is one share worth — Analyzing the core differences in trading valuation between U.S. stocks and Taiwan stocks

Many novice investors often wonder why buying and selling stocks in the Taiwan stock market requires large amounts of capital, while it’s easier to enter the U.S. stock market. The answer lies in the pricing logic of “how much is one share” and the differences in trading units. Today, we’ll explore the most fundamental yet crucial pricing rules of the stock market.

Why Are Stock Prices So Different? Starting with “How much is one share”

In the stock market, stock prices are usually expressed as the amount per share, meaning how much one share costs. Investors use this price to make buy or sell decisions. But this seemingly simple number involves complex market mechanisms.

The stock price represents the amount an investor needs to pay to purchase the stock. It constantly fluctuates based on real-time matching of buy and sell orders. In different countries’ stock markets, the unit of “how much is one share” varies. U.S. stocks are priced in U.S. dollars (USD), while Taiwan stocks are priced in New Taiwan Dollars (TWD). For example, TSMC’s stock price in Taiwan is NT$561, while the same company’s stock in the U.S. is priced at $95. The difference reflects the distinct trading units and market rules.

Is it really more expensive to buy stocks in Taiwan? The difference between “one lot” and “one share”

To understand why trading a full lot in Taiwan is more costly, first clarify the difference between “one lot” and “one share.”

The trading unit in Taiwan is “one lot,” which equals 1,000 shares; in the U.S., it’s “one share.” This fundamental difference results in vastly different amounts of capital needed.

For example, TSMC’s stock at NT$561 per share:

• To buy one lot (1,000 shares) in Taiwan, you need NT$561 × 1,000 = NT$560,000
• To buy a single share in the U.S., it costs about $95, roughly NT$3,000

This huge capital gap is a main reason many retail investors perceive Taiwanese stocks as “expensive.”

Why does this design exist?

Taiwan’s “1 lot = 1,000 shares” trading unit stems from its historical development and market design. Taiwan used to have a fixed par value system, where each share had a face value of NT$10, and the total number of shares was determined by the company’s capital. The face value was used to record the original capital contribution of shareholders and is unrelated to the current stock price. The stock price is determined by the company’s profitability and investor expectations, while the face value remains a fixed historical record.

How is the price of one share calculated and how does it fluctuate?

To see how much one share costs, investors simply check the current market price. Share prices fluctuate in real-time based on market supply and demand, independent of the face value.

For example, Tesla (TSLA) on January 6, 2023, was priced at $101.81 per share; by August 2, 2023, it rose to $254.11 per share. In less than seven months, the stock price more than doubled, reflecting investor optimism and market sentiment shifts.

Similarly, in Taiwan, as of April 30, 2024, Taiwan Cement (1101.TW) was priced at NT$32.10 per share. This number continues to fluctuate over time and market conditions.

U.S. vs. Taiwan: The vastly different ways of trading “how much is one share”

The two markets differ significantly in trading systems, affecting costs and liquidity:

Because Taiwan’s minimum trading unit is large, the Taiwan Stock Exchange offers “block trading” and “odd lot trading” to lower barriers for retail investors. Block trading involves 1 lot (1,000 shares), while odd lot trading covers 1-999 shares.

Block trading has high liquidity and executes immediately via continuous matching; odd lot trading has lower liquidity and uses periodic auction matching every minute. Investors need to weigh capital availability against trading flexibility.

The behind-the-scenes factors that determine “how much is one share”

While stock prices seem to fluctuate randomly, they are actually influenced by multiple factors:

Company fundamentals

The long-term key determinant of a stock’s price is the company’s operational ability. Well-managed, profitable companies attract investors, pushing prices higher; poor performance leads to declines. Investors evaluate company fundamentals through annual reports and quarterly earnings.

Overall economic environment

Macroeconomic indicators like GDP, inflation, interest rates, and employment rates influence the entire stock market and thus the stock price. When the economy is strong, stock prices tend to rise; during recessions, they usually fall.

Investor sentiment and market psychology

Markets are not entirely rational; investor emotions can significantly impact prices. Negative news, political instability, or global crises (like pandemics) can trigger panic selling, causing prices to drop. Conversely, positive news and optimism can boost stock prices.

Understanding how these factors influence “how much is one share” helps investors make smarter trading decisions. Whether it’s the flexible pricing of U.S. stocks or the large trading units in Taiwan, mastering the basic rules of the market is key.