Recently, many friends have asked me why Taiwanese stocks feel so expensive, while the same companies are much cheaper in the U.S. stock market. Actually, this is a good question, and the answer lies in the differences in trading units.

Let's start with the basics. The stock price is the transaction price when you buy or sell stocks, which fluctuates in real time based on the matching of buyers and sellers in the market. In the U.S., the unit of stock price is US dollars, while in Taiwan, it's New Taiwan dollars. But the key isn't the currency itself; it's the setting of the trading units.

The trading logic of Taiwanese stocks and U.S. stocks is completely different. The minimum trading unit in the U.S. stock market is one share, so you can buy directly at the price of one share. But Taiwanese stocks are different; the trading unit is a "lot," and one lot equals 1,000 shares. This is why the same company's stock can be shockingly expensive in Taiwan but much more affordable in the U.S.

Here's a practical example. TSMC's stock price in Taiwan is NT$561 per share. If you want to buy one lot, you need to pay NT$561 multiplied by 1,000, which is over NT$560k. Meanwhile, TSMC listed in the U.S. is about US$95 per share, so buying one share costs only around NT$3,000. See? The issue of how many shares are in a lot directly determines your investment threshold.

However, Taiwan has also recognized this issue. To allow retail investors to participate more easily, Taiwan introduced fractional share trading, meaning you can buy less than a full lot—down to just one share. This significantly lowers the capital barrier, but the trade-off is reduced liquidity and less immediate matching compared to full-lot trading.

The difference in trading units—one share in the U.S. and one lot (1,000 shares) in Taiwan—causes a huge disparity in trading costs and entry barriers. Plus, U.S. stock trading fees are generally lower, with many platforms offering zero commission, whereas Taiwan's commission is usually around 0.1425%. Overall, the cost advantage in the U.S. is clear.

Of course, many other factors influence stock prices beyond trading units. A company's profitability, macroeconomic environment, and market sentiment all drive stock price fluctuations. Strong-performing companies attract investors, pushing prices up; conversely, negative news or signs of economic recession can cause panic selling.

So now you understand that the apparent price differences between Taiwanese and U.S. stocks are not due to differences in company quality but are primarily caused by the design of the trading systems. If you want more flexible asset allocation, you might consider participating in both markets, choosing based on your capital and risk preferences. If you're interested in these trading details, you can check the asset comparison on Gate to experience firsthand the different trading logics of each market.