How does the math work when you buy stocks?

You have to divide the $40 into the $5,000, = 125 shares. However you would need to have extra for the broker fee or buy less shares. You would need $5,010 given a $10 broker fee. If you don't have enough for the shares, usually it will flash on your account that you don't. Then you can decide what you are going to do. The broker will not deduct the shares for you. You would have to redo the order for 124 shares.

Yes, it comes out first. If you have $5000 and you want to buy a stock whose shares are worth $40, and you have a $10 per trade commission, then you can only buy 124 shares, and will have $30 left in your account when the trade is completed.

Also, when you buy you pay the ask price (the higher price) and when you sell, you receive the bid price (the lower price). The investments banks, big brokers, and other "market makers" trade in these stocks and usually, either that is who you broker is dealing with, or you broker actually is what is called a market maker. The market maker makes a profit by buying at the bid price and selling at the ask price. This compensates the market maker from the cost of maintianing an inventory of stocks, and/or buying a seat on an exchange. It works the same as a used car dealer, you sell you care to a dealer, and he gives you well below the private market value, and when you buy, you pay well above the private market value, and makes a proffit from the spread. In stocks the spread id much smaller Usually, the spread between the bid and the ask are less than 0.25%, and are usually only a penny or two per share for widely-held large company stocks. The quoted price you see online and on TV usually reflects the price actually paid by the market makers and major participants on the major exchanges, and is usually very close to the mid-way point between the bid and the ask.

Usually, yes. Your broker commission should be a flat rate. Subtract the commission from $5000. With the numbers you gave me, you can buy up to 125 shares (only if you can trade for free). Ask your broker how much do they charge.