How to calculate the number of shares per lot? The trading units for Taiwan stocks and US stocks are very different.

Many novice investors often wonder why the entry barrier for Taiwan stocks (台股) is so high while the US stock market (美股) is relatively more accessible when they start trading stocks. The answer is actually simple—different trading units lead to huge differences in purchase costs. To understand how much money is needed for investing, first, you need to grasp the basic logic behind stock valuation.

What does the stock price represent? How to understand the concept of one share

The stock price essentially reflects the transaction price of a stock in the market, indicating how much investors are willing to pay for each share. This price is not fixed; it fluctuates in real-time based on the trading demand from buyers and sellers.

For example, if a listed company’s capital is 10 million TWD, divided into 1 million shares, then the par value per share is 10 TWD. But it’s important to note that par value and current stock price are completely different. Par value is just a historical record, while the stock price is jointly determined by the company’s profitability and market expectations. As long as investors are optimistic about the company’s prospects, the stock price will continue to rise.

Therefore, to judge how much a stock costs, investors only need to check the current market price. Different countries use different currencies for stock valuation—US stocks are priced in USD, while Taiwan stocks are priced in TWD.

How many shares are in one lot of US stocks? How many in Taiwan stocks? The core difference in trading units

This is where the problem lies: the trading units of Taiwan stocks and US stocks are completely different.

The minimum trading unit for US stocks is “one share,” meaning you can buy 1 share, 100 shares, 1000 shares, and so on without issue. But Taiwan stocks are different; the minimum unit for block trading is “one lot,” and one lot equals 1000 shares.

To illustrate with specific numbers:

• As of April 30, 2024, Taiwan Cement (1101.TW) has a stock price of 32.10 TWD, meaning each share costs 32.10 TWD.
• To buy one lot of Taiwan Cement, you need to pay 32.10 × 1000 = 32,100 TWD.
• In contrast, Tesla (TSLA) in the US was priced at only 101.81 USD per share in January 2023.

The purchase costs for the same company in different markets also highlight the difference. Take TSMC as an example: in Taiwan, (2330) stock price is 561 TWD, so one lot costs 561 × 1000 = 561,000 TWD; in the US, (TSM) stock price is 95 USD, so buying one share costs only 95 USD (about 3,000 TWD), which is nearly 20 times cheaper.

Why did Taiwan design the “one lot” unit? The difference between whole shares and fractional shares

To meet market demand, Taiwan created two trading modes: whole shares and fractional shares.

Whole share trading is the traditional bulk trading method, with the minimum unit being one lot (1000 shares). But this high threshold is too much for retail investors—in the case of TSMC at 561 TWD per share, buying one lot costs 561,000 TWD, which is not easily affordable for ordinary investors.

Therefore, Taiwan introduced fractional share trading, allowing investors to buy less than one lot (i.e., 1~999 shares). This significantly lowers the entry barrier, enabling those with limited funds to participate in stock investing.

However, fractional share trading has its drawbacks—liquidity is much lower than whole share trading. Whole share trading uses order-by-order matching for immediate execution; fractional shares are matched via periodic auction, only once per minute. If conditions permit, it is still recommended to prioritize whole share trading.

Comparison table of trading rules between US stocks and Taiwan stocks

Core factors that determine stock prices

Stock prices do not appear out of nowhere; they are the result of multiple factors working together:

Company operational performance is the most direct influence. Companies with strong financial health and profitability are more likely to attract investors, pushing up the stock price. Investors can understand this through the company’s financial statements.

Macroeconomic environment also affects the entire market. GDP growth, interest rate policies, exchange rate fluctuations, etc., indirectly influence investors’ valuation of stocks.

Market sentiment fluctuations are often underestimated. When negative news, political risks, or global economic crises occur, investors may panic, causing the stock market to plummet even if the company’s fundamentals remain unchanged.

Understanding these factors helps better judge how many shares to buy, the investment costs, and when to enter or exit the market.