I have several different accounts at Fidelity (regular taxable, 401k, Roth IRA, HSA). With the exception of the few mutual funds I have, almost everything is set for dividends and capital gains to be deposited to the core account (i.e. money market or similar). I can change this to reinvest in security. I am thinking this sounds like a good idea so I won't have to do a trade whenever enough much money accumulates that I don't want it sitting around with low return. However, I have a few questions. First, do you get charged a commission or other fee for reinvesting? Second, why would capital gains and dividends be grouped together? Doesn't this mean if I sell the stock, the profit will be used to buy that stock right back? Lastly, there are two additional checkbox options I was hoping somebody could explain: "All equity positions currently held in this account" and "Future equity purchases, transfers, and deposits to this account". Both of these seem to suggest to me that potentially a large amount of money would be used to purchase shares of a particular stock without my confirmation; in the former case all of the current cash and in the latter case any cash I deposit in the future. If this is indeed the case, wouldn't these options only make sense for one particular stock?
FOLLOW-UP: Looking around, some people suggest not doing this for taxable accounts because it complicates cost basis reporting. Is this a valid concern? Doesn't the brokerage handle that and send you the information when you sell the stock?