How many shares is a stock actually? Helping you understand the differences in trading units across global stock markets

New investors often wonder why U.S. stocks seem so cheap compared to Taiwanese stocks, even though both are stocks. Behind this phenomenon, the fundamental concept of how many shares are in one "lot" plays a crucial role. Different countries have completely different rules regarding trading units, which directly affect the amount of capital investors need to投入. Today, we’ll explore this issue in depth.

Starting with the basics: What is one share?

To understand how many shares are in one lot, you first need to understand what a "share" is.

A share is the smallest unit of stock trading. When a company issues stock, it divides its total capital into several equal parts, each called a share. For example, if a company’s total capital is 10 million yuan and it’s divided into 1 million shares, then each share has a face value of 10 yuan.

In actual trading, the stock price represents the current market trading price of one share, not the face value. The stock price fluctuates in real time based on supply and demand, company performance, investor expectations, and other factors. For example, in 2023, Tesla (TSLA) was priced at $101.81 on January 6, and by August 2, it rose to $254.11. In less than seven months, the cost to buy one share of Tesla more than doubled. This shows that while the face value remains fixed, the stock price is constantly changing.

How many shares are in one lot? Rules vary by country

This brings us to the core question: How many shares are in one lot?

The answer is straightforward—it depends on which stock market you are trading in.

In Taiwan’s stock market, the basic trading unit is called a "lot," and one lot equals 1,000 shares. That is, buying one lot of Taiwanese stocks means purchasing 1,000 shares. For example, Taiwan Cement (1101.TW) was priced at 32.10 New Taiwan Dollars (NTD) on April 30, 2024. To buy one lot, you need to pay 32.10 × 1,000 = 32,100 NTD.

In the U.S. stock market, the trading unit is simply one share, with no "lot" concept. You can buy 1 share, 10 shares, 100 shares—whatever you choose. For example, Tesla’s stock at $420 per share means buying one share costs $420; buying 10 shares costs $4,200. This provides greater flexibility for small investors.

In Hong Kong’s stock market, the situation is between the two. The trading unit is called a "board lot," but the number of shares per lot isn’t fixed; it usually ranges from 100 to 2,000 shares, depending on the stock’s price. For example, Tencent (0700.HK) might have a lot size of 100 shares when the stock price is high, but for lower-priced stocks, a lot could be 1,000 shares.

| Market | Trading Unit | Shares per Unit | Example | |--------|----------------|-----------------|---------| | U.S. | 1 share | 1 share | Tesla (TSLA.US) at $420, buy 1 share for $420 | | Taiwan | 1 lot | 1,000 shares | TSMC (2330.TW) at 1080 NTD, buy 1 lot for 1,080,000 NTD | | Hong Kong | 1 board lot | 100–2000 shares | Tencent (0700.HK) at 418 HKD, 1 lot (100 shares) costs 41,800 HKD |

Why do these rules differ?

Why do different countries have such varied trading units? This relates to history, regulation, market maturity, and other factors.

The U.S. allows trading in individual shares due to its mature retail brokerage system and widespread online brokers. Platforms like Robinhood have made it easy for small investors to participate, standardizing single-share trading.

Taiwan and Hong Kong’s lot or board lot system originates from traditional over-the-counter trading days. Back then, manual clearing was required, so exchanges mandated trading in whole lots to simplify processes. Although technology now makes such restrictions unnecessary, the rules persist.

Additionally, the setting of trading units considers the stock’s price range. For low-priced stocks, trading in just one share per lot might be impractical, so more shares are grouped together to keep the total lot price within a reasonable range.

What does this mean for investors?

Understanding how many shares are in one lot directly impacts your investment decisions.

Investment thresholds vary significantly: Since U.S. stocks can be bought in single shares, you might start investing with just 5,000 RMB. In contrast, Taiwanese stocks often require tens of thousands of RMB to buy one lot. For investors with limited funds, the U.S. market offers a lower barrier to entry.

Capital efficiency: With the same amount of capital, U.S. investors can diversify by purchasing shares in multiple companies, while in Taiwan, they might only afford a few lots. This affects portfolio flexibility.

Psychological factors: Buying one lot of Taiwanese stock might require tens of thousands of RMB, whereas a single U.S. share might cost only a few hundred dollars. Many investors prefer U.S. stocks because they are psychologically more acceptable and easier to grasp.

Summary

The question of how many shares are in one lot may seem simple, but it actually reflects the diverse design philosophies of global stock markets. The flexibility of the U.S. market allows small investors to participate easily, while Taiwan and Hong Kong’s lot systems simplify traditional trading processes. Choosing which market to invest in depends on your capital, risk appetite, and trading habits. Regardless of your choice, understanding trading units is the first step toward becoming a mature investor.