Recently, many novice investors have found it confusing to figure out how many shares are in one stock, why trading in Taiwan’s stock market feels so expensive, and why the U.S. stock market seems so cheap. In fact, this comes down to differences in trading units.

First, let’s cover the most basic concept. The stock price is the trading price of a stock, which represents how much money you need to pay to buy one share. Different countries use different currencies: U.S. stocks are priced in U.S. dollars, while Taiwan stocks are priced in New Taiwan dollars. The stock price moves in real time based on the transaction prices between buyers and sellers—this is easy to understand.

So what exactly is one share? Simply put, listed companies divide their shares into a number of portions, and the smallest unit is one share. The stock price shown on the market is the transaction price of one share. For example, if a company’s capital of 10 million is divided into 1 million shares, then the par value per share would be 10. However, the par value has nothing to do with the stock price. The stock price is determined by the company’s profitability and investors’ expectations. As long as everyone is confident in the company, the stock price will keep rising.

Now here is the key point: how many shares are in one “lot”? In the Taiwan stock market, one lot equals 1,000 shares. This is why trading Taiwan stocks looks so expensive. Taking TSMC as an example, suppose the current stock price is 561 New Taiwan dollars. Then buying one lot costs 561 multiplied by 1,000, which is about 561,000 New Taiwan dollars. For retail investors, that is indeed a big amount.

The U.S. market is different. In the U.S., the trading unit is one share—there is no “lot” concept. If TSMC is listed in the U.S. as well (ticker symbol TSM), and the stock price is about 95 U.S. dollars, then buying one share costs only 95 U.S. dollars, which is equivalent to a bit more than 3,000 New Taiwan dollars. That’s why U.S. stocks appear so much cheaper.

Because the full-lot trading threshold in Taiwan is too high, fractional share trading was introduced later, allowing retail investors to buy and sell shares less than one lot (from 1 to 999 shares). The liquidity of fractional share trading is not as good as full-lot trading, but at least it lowers the entry barrier. Full-lot trading hours are 9:00 a.m. to 1:30 p.m. during the trading day, and from 2:00 p.m. to 2:30 p.m. after market hours. Fractional share trading has slightly longer hours: after-hours trading is from 1:40 p.m. to 2:30 p.m.

Checking a stock price is simple—you just look at the current market price. For example, on August 2, 2023, Tesla was priced at 254.11 U.S. dollars per share, and by January 6, it had risen to 101.81 U.S. dollars, which is more than double in under 7 months. Taiwan stocks follow the same logic: at the end of April 2024, Taiwan Cement (Taiwan Cement) was 32.10 New Taiwan dollars per share, so one lot is a bit above 32,000 New Taiwan dollars.

There are mainly three factors that affect stock prices. First is the company’s fundamentals: financial condition, profitability, and development prospects are all important, and you can learn about them from financial reports. Companies with strong performance naturally attract investors, and their stock prices rise. Second is the macroeconomic environment—big-picture factors such as GDP, interest rates, and inflation can all affect prices. Third is market sentiment: investors’ optimism or pessimism can also drive stock price fluctuations. Bad news, political instability, or global events can trigger panic and cause the stock market to fall.

To sum up, the answer to the question of how many shares are in one stock is 1,000 shares. The U.S. stock market has no concept of a “lot”—it is only shares. This difference leads to completely different trading thresholds in the two markets, and it is something that often confuses beginners.