Unveiling the mystery of how many shares are in one stock: Why are there such big differences between US stocks, Taiwanese stocks, and Hong Kong stocks?

Many investors notice an interesting phenomenon when trading across markets: why does buying a single share in the Taiwan stock market cost nearly a million, while in the U.S. stock market it only takes a few hundred dollars? The secret lies in the seemingly simple concept of “lot size.” Each market has different trading unit designs, which not only determine how many shares are bought per transaction but also directly impact retail investors’ investment thresholds.

Why Do Different Markets Have Such Varying Trading Units?

Stock markets around the world adopt vastly different trading unit systems. The U.S. stock market’s trading unit is 1 share, Taiwan’s is 1 lot (1,000 shares), and Hong Kong’s is 1 lot (with the number of shares varying based on price). These differences are not arbitrary; they reflect each market’s historical development and regulatory philosophy.

Why are these settings in place? The core consideration is: markets aim to balance liquidity and investment thresholds through trading units. The U.S. uses a minimum unit system to allow everyone to participate with minimal capital; Taiwan and Hong Kong, with larger trading units, ensure market liquidity and attract institutional investors.

This design directly results in huge differences in investment costs. Whether a stock is one share or a thousand shares determines how much initial capital you need.

What Is Stock Price? How Much Is One Share?

Before delving into “lot size,” it’s essential to clarify two basic concepts: stock price and number of shares.

Stock price refers to the trading price of a single share, representing how much money an investor needs to pay to own that share. It is expressed in the local currency—USD in the U.S., New Taiwan Dollars (NTD) in Taiwan, HKD in Hong Kong. Stock prices are determined by real-time matching of buy and sell orders and fluctuate constantly.

The key point is: the stock price always refers to one share. When you see Tesla’s stock at $420, it means buying one share costs $420; if TSMC’s stock is at 1080 NTD, that’s the price for one share.

Many beginners confuse face value and stock price. In fact, face value (e.g., the common 10 NTD in Taiwan) is just an accounting unit representing the company’s capital contribution at issuance, not directly related to current stock price. Stock price is entirely determined by the company’s profitability, growth potential, and investor expectations. A company whose stock was once 10 NTD can rise to thousands, reflecting value growth.

How Many Shares Are in One Lot? A Comparison of Trading Systems

Since stock price indicates the price per share, “one lot” or “one board lot” is the minimum trading unit set by the market. Different markets have different rules:

U.S. Market: 1 share = 1 share

• Trading unit: 1 share
• Features: Most flexible, lowest investment threshold
• Example: Tesla at about $420 per share, buying one share costs $420

Taiwan Market: 1 lot = 1,000 shares

• Trading unit: 1 lot
• Features: Larger units to ensure liquidity
• Example: TSMC at 1080 NTD per share, one lot costs 1080×1000 = 1,080,000 NTD (~$35,000)

Hong Kong Market: 1 lot = variable number of shares

• Trading unit: 1 lot
• Features: Dynamic, adjusts based on stock price
• Example: Tencent at 418 HKD per share, if one lot is 100 shares, then one lot costs 418×100=41,800 HKD

This comparison clearly shows the issue. The same price level (around 400+), in the U.S. you can buy one share for a few hundred dollars, in Taiwan you need 1,000 shares, and in Hong Kong, 100-1,000 shares. This explains why with the same amount of money, U.S. investors can buy dozens of different stocks, while Taiwanese investors might only afford one or two.

Why Set “Lot Size” Rules?

This seemingly unreasonable design actually has deep market logic.

First, from a liquidity perspective: larger trading units ensure higher transaction volumes per trade, making the market more active. If Taiwan also adopted a one-share trading system, it could lead to a flood of small orders, reducing market efficiency.

Second, from a risk management perspective: larger minimum investment amounts limit excessive leverage and speculative behavior, helping to maintain market stability.

Third, these differences also reflect each market’s historical development stage. The U.S., as the most mature stock market globally, offers maximum flexibility; Taiwan and Hong Kong, which opened later, adopted more conservative rules.

How Lot Size Affects Your Investment Cost

Once you understand the differences in “lot size,” you realize why the same stock can have vastly different investment costs across markets.

Suppose you have 50,000 RMB to invest:

• In the U.S.: You might buy 100-200 shares across different stocks, building a diversified portfolio
• In Taiwan: You might only afford 4-5 lots, limiting your choices
• In Hong Kong: You could buy 10-15 lots, somewhere in between

This difference significantly impacts small retail investors. The cost disparity directly influences investment strategies in each market. U.S. investors can pick individual stocks freely; Taiwanese investors often have to choose between index funds and large-cap stocks; Hong Kong investors are in a relatively balanced position.

How to Invest with Limited Funds Across Different Trading Units?

For investors with limited capital but interest in multiple markets, here are some practical options:

1. Choose index funds or ETFs: Buying market index funds allows exposure to the entire market with one lot, avoiding the need to pick individual stocks.

2. Gradual investment: Start with markets with lower transaction costs (like the U.S.), accumulate funds, then expand into other markets.

3. Leverage tools: If experienced and willing to accept risks, some platforms offer CFDs or leveraged products to participate in different markets with less capital. Be cautious of leverage risks.

4. Dollar-cost averaging: Regularly investing over time helps spread out costs and reduce timing risks.

Summary: The Market Logic Behind Lot Sizes

The “lot size” concept, seemingly simple, actually reflects each market’s design philosophy, historical stage, and investor targeting.

The U.S. system’s 1-share units embody maximum flexibility and democratization, allowing ordinary investors to participate easily; Taiwan’s 1,000-share lots ensure liquidity and institutional participation; Hong Kong’s variable lot sizes balance the two.

Understanding these differences helps you make more rational choices about which markets to invest in and how to allocate your funds. Remember, trading units are just one aspect of investment costs; factors like exchange rates, transaction fees, and taxes also matter for final decision-making.

In exploring different markets, choosing one that fits your capital size and investment goals is key.