Must-read before buying stocks: How much does one share of stock actually cost? The calculation methods for Taiwan stocks and US stocks are quite different

Many newcomers to the stock market tend to make the same mistake—seeing a stock trading at a few tens of dollars in the US market and thinking it’s cheap, then turning to the Taiwan stock market where a share costs hundreds of dollars and getting scared off. Actually, there’s a fundamental difference in trading systems behind this, and this difference directly affects how much capital you need to get started.

Don’t Be Fooled by Stock Prices: Price per Share and Buying Costs Are Not the Same

In the stock market, “stock price” refers to the amount investors pay to buy or sell one share of stock. It sounds simple, but there’s a common confusion—stock price represents the unit price, not the total capital you need to invest.

For example, TSMC’s current stock price is NT$561. Many beginners think, “I only need NT$561 to buy one share,” but that’s far from the truth. This involves different trading unit systems across markets.

The Fundamental Difference Between Taiwan and US Markets: Different Trading Units, Huge Entry Barriers

Taiwan stocks use “one lot” as the minimum trading unit, which is 1000 shares. If you buy one lot of TSMC, you’re purchasing 1000 shares at once. So when you see TSMC’s stock price at NT$561, the actual cost to buy one lot is:

NT$561 × 1000 = NT$561,000

That’s why ordinary retail investors often can’t afford to buy one lot of TSMC.

In contrast, US stocks are traded in units of 1 share. If Tesla’s stock price is $254, you can buy just one share for $254, without needing to reach 1000 shares. This results in a completely different entry barrier for the same company in the two markets.

TSMC is a typical example:

• Buying one lot in Taiwan: NT$560,000+
• Buying one lot in the US: only $95 (about NT$3,000)

The difference in entry cost is over 200 times.

Face Value ≠ Stock Price: Don’t Confuse the Two Concepts

Here’s another common misconception—stock face value. Most listed companies in Taiwan have a face value of NT$10, which is a historical legacy. But face value is just a way to record the division of share capital and has no direct impact on the stock price. The stock price is mainly determined by the company’s profitability, growth prospects, and investor expectations.

So, when considering how much money to spend on a stock, just look at the current market price; there’s no need to check the face value.

Fractional Trading Saves Small Investors, But Liquidity Is the Price

Since buying a full lot is expensive, Taiwan’s market has introduced “fractional trading”—buying and selling less than one lot of 1000 shares. This allows investors with limited funds to participate.

However, fractional trading has a clear disadvantage: lower liquidity and slower matching speed. Whole-lot trades are executed immediately during trading hours, while fractional trades are matched once per minute during auction. This means your order might not be filled immediately, and prices can fluctuate.

Therefore, professional investors still recommend—if you can buy whole lots, do so; they offer better liquidity and trading efficiency.

The Three Major Drivers of Stock Prices: The Real Factors You Need to Watch

Since stock prices are not decided out of thin air, what truly influences how much a stock is worth?

First is the company’s fundamentals. Companies with strong financial reports, profitability, and growth potential attract investors, causing stock prices to rise. Conversely, they fall when fundamentals weaken.

Second is the overall economic environment. GDP growth rate, interest rate changes, inflation data—all impact the overall market trend. When the economy is good, everyone rushes to buy; during a recession, everyone sells.

Finally is investor sentiment. This is often overlooked but can be the most damaging. Negative news, political fluctuations, or global events (like pandemics) can trigger panic selling in a short time, causing stock prices to plummet.

Practical Tips: Understanding Trading Units to Allocate Funds Precisely

Now you know—the cost of one lot of stock = unit stock price × number of units per lot.

In Taiwan, be prepared to have at least enough capital for NT$561,000 to buy a full lot. In the US, you have more flexibility and can buy in smaller amounts. Which market to choose and how much capital to prepare should be based on your financial situation and investment strategy.

Don’t be fooled by low stock prices; always remember—it’s the unit price that matters, and the actual cost is what you pay.