ESPPs give employees an opportunity to buy the company stock at a discount. In both of the examples I'm aware of, the companies give a 15% discount on the LESSER of the price on the grant date and the price on the purchase date. The purchase dates are every six months, while the grants I've seen are either 12 or 24 months.

We can analyze this mathematically by breaking it into three cases. For concreteness, let's look at ADBE for a grant date of 2019-01-02. The stock is trading at \$224.27/share currently:

First, let's consider the case of the stock being exactly the same price on the purchase date. The lesser price is then \$224.27, and an ESPP enrollee will be able to purchase at \$224.27*85%=\$190.63. Those shares will still be worth 224.27 though, so the enrollee has made \$33.64 per share they purchase.

Next, consider the case of a decrease in value of the stock on the purchase date. Again, for concreteness, let's assume it goes down to \$200/share. Now the lesser price is \$200 and the purchase price is \$200*85%=\$170. The enrollee still makes \$30/share!

Finally, consider the case of an increase in value of the stock on the purchase date. For concreteness, let's assume it goes up to \$250/share. The lesser price is now the original price of \$224.27, so the enrollee can purchase at the \$190.63/share price point as in the first case. There's a critical difference, though: each share they purchase is now worth \$250/share, so the enrollee makes \$250-\$190.63=\$59.37/share this time!

At this point, you're probably wondering: what's the catch? What trick did traviscj pull on me?

There isn't one, but there is an important caveat: this assumes you immediately sell after the purchase occurs. You might or might not want to do this! Several things play into this: Do you value holding the stock? (e.g. you want to collect the dividends, etc) What are the tax implications of selling vs holding? Selling immediately will trigger the short term capital gains tax! (since you haven't held them for longer than a year) Holding for at least a year will qualify the earnings for long term capital gains tax, which is generally more favorable. But this incurs the risk of the stock moving against you within the holding duration.

DISCLAIMER: I am not a tax professional! Please consult a one before taking action on this information!