I am completely new to this, so understand that I realize that I still have a lot to learn before I invest any significant sum of cash. I've bought a few shares of stock (let's call it ABC) through Scottrade to get a feel for it. I'm trying to understand how gains/losses are calculated on sell.
Assume this all happens in the same year, if it would be easier to explain. Given this scenario excluding commissions:
- Bought 5 ABC @ $1/share -> order cost me $5
- Bought 10 ABC @ $2/share -> order cost me $20
- Sold 1 ABC @ $10/share -> I got $10
How are my capital gains calculated? It seems like it would depend on whether I sold 1 from the first 5, (gain of $9) or 1 from the second 10 (gain of $8).