Someone just asked me why Taiwanese stocks are so expensive, while U.S. stocks are incredibly cheap. Actually, there’s a key difference behind this, which many novice investors completely overlook.

To start with, many people don’t quite understand the basic concepts of stock trading. What is a stock price? What is a share? How do you determine how much a share costs? These seemingly simple questions actually hide completely different trading logic between U.S. stocks and Taiwanese stocks.

Let’s begin with the most fundamental. The stock price is the trading price of a stock, representing how much money you need to buy or sell one share. This price fluctuates in real time, determined by the latest transaction prices between buyers and sellers. For example, TSMC’s stock price might be 561 New Taiwan Dollars, and Tesla’s stock price might be 254 U.S. Dollars. This directly reflects how much one share costs.

But here’s a key point—Taiwanese stocks and U.S. stocks have completely different trading units. U.S. stocks are traded per “share,” meaning you can buy 1 share, 10 shares, 100 shares, whatever you like. But Taiwanese stocks? The minimum trading unit is a “lot,” which equals 1,000 shares. That’s where the problem lies.

Let’s make an example clear. Suppose TSMC’s stock price is 561 NT dollars per share. How much does one lot of TSMC cost? 561 multiplied by 1,000, which equals 560,100 NT dollars. Imagine an average worker needing to spend 560,100 NT dollars just to buy one lot of TSMC. What does that mean for retail investors? Meanwhile, the same TSMC stock listed in the U.S. has a price of $95 per share. You only need to spend $95 to buy one share, which is only about 3,000 NT dollars—an enormous difference.

Because of this, Taiwanese stocks later introduced “odd lot trading,” allowing investors to buy less than one lot of stocks, lowering the entry barrier. However, odd lot trading has lower liquidity and different matching methods, so there are still some restrictions.

Returning to your initial question—why are U.S. stocks cheap? It’s not that U.S. stocks are truly cheap; it’s because the trading units are smaller. The question of “how much is a share?” seems similar between U.S. stocks and Taiwanese stocks, but after multiplying by the difference in trading units, the actual capital required is worlds apart.

Besides the trading units, stock prices are also influenced by company fundamentals, macroeconomic conditions, and market sentiment. Companies with good performance attract investors and push stock prices higher; the opposite is true as well. So rather than fixating on how much a single share costs, it’s better to pay more attention to the company’s profitability and growth prospects.