Recently, many novice investors have been stuck on one question—why are the trading costs so high in the Taiwan stock market, while the US stock market is so cheap? The root of this difference is quite simple: it lies in the different trading units.

First, let's state the conclusion: the trading unit for US stocks is 1 share, while for Taiwan stocks it is 1 lot (1,000 shares). This seemingly simple distinction results in a huge difference in investment thresholds.

To understand clearly, let's look at a real example. TSMC is listed on both the Taiwan stock market and the US stock market. The stock price in Taiwan is about 561 New Taiwan Dollars per share, while in the US it is $95 per share. Buying one lot of TSMC in Taiwan costs 561 × 1000 = 560k New Taiwan Dollars, but in the US it only costs $95, which is just over 3,000 TWD when converted. See, the difference between a few shares and a lot directly affects how much capital you need to prepare.

So, what is a share? Simply put, the stock price represents the transaction price of one share. The company divides its shares into multiple units, each representing a portion of ownership. The price shown on stock trading software is the current market price of one share. For example, if a certain day the stock price of Taiwan Cement (Taiwan Cement Corporation) is 32.10 TWD, it means one share costs 32.10 TWD.

As for how much a lot costs, the calculation is straightforward: price of one share × 1000 = price of one lot. If one share is 561 TWD, then one lot is 561,000 TWD. This is also why many retail investors cannot afford to buy a lot—the threshold is too high.

Therefore, Taiwan's stock market later introduced fractional share trading, allowing you to buy from 1 to 999 shares, so you don't have to buy a full lot. This significantly lowers the capital barrier. But note that fractional shares have lower liquidity compared to full lots, and matching orders can be slower. So if your funds permit, it’s better to trade full lots.

Many factors influence stock price movements. A company's profitability, the overall economic environment, investor sentiment—all these are directly reflected in the stock price. Good performance naturally attracts buyers, pushing the price up; the opposite is also true. Sometimes, even a negative news event or geopolitical incident can trigger market panic, leading to a sharp decline in stocks.

In summary, the difference between one share and a few shares is essentially a matter of trading units. US stocks can be bought in units of 1 share, while Taiwan stocks are bought in lots of 1,000 shares (or fractional shares). This determines how much money you need to prepare when entering the market. Understanding this concept and choosing the market and trading method that suits you best is what makes a smart investor.