Stock Trading and Other Things

How does commission work for stock brokers?

I trade through scottstrade and am very new to it. Say i buy 1,000 shares at 1.00 and sell at 2.00 do i need to pay a commision through scottstrade? if so how much? Do they automatically take it out?
is it just the 7$ per share sell?

Public Comments

1. You pay $7 on each order (both the buy and the sell).

2. If you bought 1000 shares at $1 dollar a share the total cost of the trade would be $1007 dollars. Commission gets added in to the cost on the buy side automatically.

If you sold your shares at $2 dollars a share the proceeds would be $2000-$7=$1993. Commission is deducted from the proceeds on the sale side automatically.

This is the way the IRS sees it as well. To the IRS you made $1993-$1007 and will have to pay taxes on the difference.