Recently, many novice investors have been particularly confused about trading units, especially when comparing Taiwan stocks and U.S. stocks. Why does buying and selling Taiwan stocks seem so expensive, while U.S. stocks are much cheaper? The key lies in the difference in trading units.

First, let's talk about what stock price is. The stock price is the trading price of a stock, representing how much money you need to spend to buy or sell one share. It is determined by real-time matching between buyers and sellers and fluctuates with market changes. Different countries use different currencies to express it—U.S. stocks in U.S. dollars, Taiwan stocks in New Taiwan dollars.

Here, two concepts need to be clarified—"one share" and "one lot." The trading unit for U.S. stocks is "one share," while Taiwan stocks have two units: "one share" and "one lot." The most important point is that one lot equals 1,000 shares. That is to say, buying one lot of Taiwan stocks actually means buying 1,000 shares.

How to see how much one share costs? Just look at the current market price. For example, if at a certain time TSMC's stock price is 561 New Taiwan dollars, that is for one share 561 NT dollars. To calculate the cost of one lot, multiply 561 by 1,000, which equals 561,000 NT dollars. For most retail investors, this is indeed a large amount of money.

In contrast, the trading unit for U.S. stocks is just one share, so the threshold is much lower. The same TSMC stock in the U.S. version (TSM) is only about $95 USD, so buying one share costs just $95 USD, which is over three thousand New Taiwan dollars. That’s why U.S. stocks seem cheap—it's not that the price itself is lower, but the trading unit is smaller.

Because the threshold for buying and selling a whole lot in Taiwan stocks is too high, the market has introduced fractional trading. Fractional trading means buying and selling less than one lot (from 1 to 999 shares), and it can be done during and after trading hours. However, liquidity for fractional shares is lower, and matching is not as fast as for whole lots, so if possible, it’s better to trade whole lots.

Many factors influence stock prices. The company's fundamentals are the most important, including financial condition and profitability. The macroeconomic environment also affects prices, such as GDP and interest rates—macro factors that can influence stock prices. Market sentiment also plays a role—investors' optimism or pessimism, and sudden news events can trigger market volatility.

Therefore, understanding basic concepts like how many shares are in a lot and how much one share costs is very important for novice investors. In Taiwan, the minimum for whole lot trading is one lot, which is 1,000 shares, and that’s why many people think Taiwan stocks are expensive. But now, with fractional trading options, the threshold has been lowered significantly, making it much easier to participate in the stock market.