LiFin Lab ยท Financial Derivatives ยท Class 1

๐ŸŠ The Orange Contract

A three-way forward contract negotiation, live in your classroom โ€” then reveal what actually happened three months later, and see exactly what hedging bought each side. Negotiate off-tool first; this page records the deal and does the reveal.

1 The Scenario (read aloud / project to the whole class)

Porschee Farms grows oranges, ready to harvest in three months. Three parties are about to negotiate a forward contract: a price locked in today, for oranges delivered in three months, no matter what the spot price turns out to be by then.

Nobody in this room has been given the same set of facts โ€” that's deliberate. Each party has their own read on the market, their own reasons for wanting this deal, and their own private walk-away number. You'll find out yours on the next screen. Don't assume you know anyone else's, and don't compare screens once you do.

This is a genuine three-way negotiation. The facilitator sends each group its own link โ€” landing directly on that one role's card, with no way to see the others. If you're the facilitator setting this up for the first time, the plain link you're on now lets you preview all three and grab the links to send out.

Curated by Prof. Shalini Velappan, IIM Trichy · LiFin Lab