Friday, September 6, 2019
Program Design of an Outpatient Adolescent Prevention Essay Example for Free
Program Design of an Outpatient Adolescent Prevention Essay The adolescence stage is often characterized as the stage of maturing from childhood to adulthood. This stage of maturing commonly occurs at the age of 12 for males and 14 for females. This is where significant developments in both physical and mental abilities of an individual begin to happen as early signs of puberty stage. This is the moment where a person or an individual starts to operate according to his or her own personal views in life and practice independence from their guardians. Furthermore, adolescence is the stage of trials where teenagers are expected to be active in doing things that differ from the usual, which will satisfy their urges due to their growing curiosity. Professionals normally define adolescence as the most critical stage of growing up. This is where an invidual experiences sudden changes in sexual drives, acquire mood swings, develop relationship with the opposite gender, and encounter different kinds of difficulties in shool and at home. Apart from these technical defiinitions of adolescence stage, it is also the stage where young people from 12 to 19 years old start to be involved in different types of substance abuse (Answers.com Health, 2008).            There are different kinds of substance abuse that adolescence are faced with, namely, cigarettes, alcohol, and drugs. These are the most popular substances of modern time amongst teenager. According to recent reasearch archives, data shows that alcohol and drug abuse are the most common substance that teenagers abuse. In 2006, there was 1.2 million adolescents from 12 to 17 years old who smoked cigerettes; 631,000 drank alcohol; and 586,000 experienced drug dependency (Focus Adolescent Services, 2008).            This data clearly indicates that most of young individuals in the puberty stage are involved to these kinds of abuses. Figures mentioned show that drug abuse has the lowest percentage of abuse among the three substances. Continuous efforts and programs to decrease the number of adolescents involved in drug dependency is constantly needed because of the high potential hazardous effect it can cause to the life of young individuals.            Moreover, efforts and supportive programs are implemented over the years, considering the serious effect that drug abuse can cause on the lives of the youth. Because of the active campaign to battle adolescents drug dependency, success is evident in positive results that show the decreasig number of young ones involved in drugs.            One effective way of treatment for adolescent drug dependency is by means of drug rehabilitation centers. This is the traditional method for treating drug dependency among individuals. These centers are characterized as the special environment for drug abusers coming from different backgrounds, who are advised to stay in the facility for a certain period of time to achieve the needed treatment for addiction. These treatments include detoxification and counselling for possible success of recovery from drug dependents (theraphistunlimited.com outpatient). In addition, drug rehabilitation centers gurantee to properly address the needed medications of drug addicts through effective programs conducted by professional doctors, psychiatrists and counsellors.            Aside from the traditional way of drug rehabilitation, another possible way to properly address the abuse of drugs among teenagers is through outpatient rehabilitation. This program has the same purpose of addressing needed medications for adolescent drug abusers. However, with this type of program, patients no longer need to stay inside the rehabilitation center to get needed attention from addiction to recover from drug abuse. Basically, outpatient rehabilitation is like a live-in residential program that is usually done at home (theraphistunlimited.com outpatient). Although outpatient program is advisable for minor cases only, it has a big potential to be as effective as the traditional rehabilitation center. With the proper formulation and implementation of this program for adolescents involved in drug abuse, outpatient program can be a reliable way to properly address drug abuse among teenager. Furthermore, this type of program is advisable to ensure continuous recovery of the patient after undergoing treatment in a rehabilitation center (theraphistunlimited.com outpatient).            In accordance with the concept of outpatient rehabilitation program, I designed a program design for outpatient adolescents who engage in drug abuse. This program is formulated to contribute on the ongoing campaign to lower the rate of adolescents that are suffering from drug abuse. The main objective of this program is to protect the adolescents from the risk of further deterioration of drug abuse. Drug dependency in the puberty stage is a critical issue that needs to be addressed. Nevertheless, this program will make its own contribution to ease the problem of drug abuse. It will focus on rehabilitative works for adolescents to further effect recovery from drug abuse and addiction. Outpatient rehabilitation may be advisable among adolescents with minor drug abuse only. However, the program will also serve as a safety measure to ensure the effectivity of the rehabilitation center towards full recovery of the patient. Furthermore, the target of this program are the teenagers who have undergone treatment in rehabilitation centers for treatment of drug abuse. With this design, adolescents will be advised to attend a program that will keep them interested to stay away from drugs and show them positive outcome of recovering from drug abuse.            With the understanding that teenagers are having a hard time recovering from drug abuse, the design of this outpatient program will protect the iniatives done by the decisive adolescents to recover from drug abuse. Also, through this program, patients will get the guarantee of effective service to help regain composure as they start to work their way to be part of the community again. Furthermore, this program will work to maintain the momentum of affecting change towards full recovery of adolescents from drug abuse. Its service will be characterized as a further rehabilitative medication for adolescents.            To be an effective outpatient rehabilitation program for adolescents, the program is composed of major features to address accordingly the needed treatment for drug abuse. First on the list is to empower family support. This is to explain to the family that their efforts and care is needed for the recovery of the patient. Second, the Comprehensive Education about drugs, which will give the patient the needed information about the proper use of drugs and its negative effect to the body if abused. With this, adolescents may understand that abusing drugs can cause serious effects in their health. Third is counselling and sessions with a former adolescent drug abuser who succesfully recovered from addiction. The primary purpose of which is to inspire the patient to work hard for recovery and instill positive views to stop drug abuse for a better life and future. Fourth is the Recretional Activity, which aims to give the patient a chance to be involved in various acitivities to regain confidence that will help him or her start a new life after engaging in drug addiction. Fifth is the Religious exercise. With this, adolescent drug abusers may realize the bright side of living a new life. Last of the features is regular check-ups of physician and psychiatrist to address proper medication and record the improvement of the patient. References  Focusas Adolescent (2008) Drugs and Teen Substance Abuse: Retrieved April 3 2008:            http://www.focusas.com/substanceabuse.html Narconon. (2007). What is a Drug Rehabilitation Center. Retrieved April 3 2008 from            http://www.narcononstonehawk.com/what_is_drug_rehab.php  theraphistunlimited.com outpatient(2008), Outpatient Drug Rehabilitation: Retrieved april 3, 2008     from http://therapistunlimited.com/index/Articles/Therapy++Rehab+Services/Outpatient Answers.com Health. (2008). Adolescence. Retrieved April 3, 2008, from            http://www.answers.com/topic/adolescence?cat=health
My Dream Career Essay Example for Free
My Dream Career Essay When I was still young, I used to do my friends’ hair as a hobby. Most of my friends liked the hair style that I did for them. I also remember, how happy I was, each time I did the hair of my friends. However, I never thought that this hobby could possibly turn into my dream career. After I entered the junior high school, which was an all-boy school, I realized that I was left out in the cold by classmates just because I was interested in stylizing hair. I would bring lots of magazines to the school to keep up-to-date with hair styling trends. Whenever I was reading the magazine, my classmates would say, â€Å"Girlish boy, you should’ve been born as a girl. †I guess having an interest in hair style wasn’t viewed as a profession for a normal boy. In my last year of middle school, there was one unforgettable event that made it enjoyable and memorable. In Korea, on a usual school day, students are not allowed to use any gel, or spray on their hair. Therefore, every student waits for the graduation photo day because this is the day they can do their hair with hair stylish products as much as they please. As other boys did, I brought hair gel and dryer to do my hair at school. I didn’t do my hair at home in the morning because I knew the hair looks best after putting hair stylish products. After I did my hair, some of my classmates, including the classmates who had been calling me â€Å"girlish boy,†came to me, and asked me to do their hair. They said, â€Å"If we all like our hair, we won’t call you girlish boy anymore. †It was an unexpected suggestion, but I was confident that they would like my job. So, I accepted their suggestion, and tried my best to stylize their hair using gel and dryer. Fortunately, they all liked their hair, and a few weeks hence, the graduation photo also came out really good to everybody’s expectations. Since then, they became my friends, and we still keep in touch, although I’m currently living in the U. S. By the time I entered the high school, another unforgettable event happened that confirmed my plans for becoming a professional hair designer. One bright day, I and my eldest brother visited â€Å"Hair Day,†which was owned by my brother’s friend, Paul Kim, in Seoul. The name of the store was quite impressive to me due to its unique name, â€Å"Hair Day,†although a typical name like â€Å"hair salon†could have been more meaningful. Paul Kim is a very famous hair designer in Seoul, and has many Korean celebrities as his regular customers. When I visited his studio for the first time, I saw a famous Korean celebrity, Bi, who is better known as â€Å"Rain†in the U. S. As he entered the studio, I hardly recognized him because of his messy hair. However, after Paul Kim worked on his hair, he immediately transformed into a gorgeous celebrity known to everybody. The hair style that Paul Kim had done for Bi was the same style I had seen on television. Since Bi is so popular, and his hairstyle is always up-to-date, many young boys in Korea mimic his hairstyle. Moreover, all of Bi’s hair styles that were shown on Korean television were the work of Paul Kim. After Bi left, an English-Speaking customer came into the studio to get a hair cut. The customer seemed an acquaintance of Paul Kim because he was delighted to see him. When they spoke with each other, I was amazed at Paul Kim’s ability to speak English. Later, I was told by my brother that Paul Kim had studied in the U. S. , and had obtained a Business Administration degree, which is possibly one of the reasons his hair studio is doing so well. Ever since I visited Paul Kim’s hair studio, I had a strong desire to become a famous hair designer, who is not only intellectual but also has a good aesthetic sense. I decided that Paul Kim is truly a man, whom I want to emulate when I grow up. The female hair designers outnumber the male hair designers in Korea. However, most of the notable hair designers in Korea are men. I hope one day I will be one of those notable hair designers not only in Korea but also in the entire world.
Thursday, September 5, 2019
Anaesthetic Practice Appendectomy At Second Trimester Of Pregnancy Nursing Essay
Anaesthetic Practice Appendectomy At Second Trimester Of Pregnancy Nursing Essay This is a reflective essay based on my personal experience as a student anaesthetic practitioner which happened during in one of my clinical placements in an acute hospital. This is a case of a 42 year old at her 24 weeks gestational pregnancy who underwent an emergency appendicectomy under a general anaesthesia with difficult intubation. I will refer to patient as Mrs. G in order to keep her confidentiality (NMC Code of Conduct 2008). The Gibbs reflective cycle will be the framework of my reflection (Jasper 2003) which is shown in Appendix A. Mrs. G. had been admitted due to nausea, vomiting, fever, right abdominal pain, and mild elevation of her white blood cell count which are the presenting symptoms of appendicitis. She underwent ultrasonography of abdomen and confirmed an acute appendicitis, thus, an urgent booking for an open appendicectomy was done. The patient proceeded to the operating theatre with little delay to minimise the sequence to perforation. Such occurrences are uncommon, however, seeing that most cases of appendiceal perforation occur earlier to surgical assessment as described by MacMahon (1991). The theatre team gathered to do a preoperative briefing. The Operating Department Practitioner (ODP), anaesthetist, surgeon, obstetrician, neonatologist, midwife, circulating, scrub nurse and myself were present (WHO 2008). After doing all the routine checks of anaesthetic equipments and drugs as advised by the AAGBI 2004, I went to check the patient (AfPP 2007), the informed consent (DOH 2009) then accompanie d her into the anaesthetic room. Markedly, Mrs. G looked dehydrated, due to fever and reduced oral intake, hence, intravenous fluids was initiated, and pulse, blood pressure, ECG, oxygen saturation and urine output was monitored closely. A Foley catheter was inserted in theatres to ensure adequate urine output. Electrolyte deficiency should be corrected before the induction of general anesthesia (Shields Werder 2002). As a health care professional and a student, I felt pity on Mrs. G because of the severe pain she was having, but what I could only give is to support her. Mrs. G and her husband were in the holding bay and while waiting there to be brought inside the anaesthetic room, apparently, they looked very upset. I stayed with them. I remembered that I should always be present especially when the surgeon, anaesthetist and the whole medical staff discuss the diagnosis and prognosis with them. This action will ensure that someone who will have also heard the discussion dialogue will support the patient, family or carer. We should be aware of the need for privacy when giving information and must endeavour, where the physical environment allows using a closed door environment to ensure absolute confidentiality. We also provide appropriate support to relatives by accompanying them and the patient into the anaesthetic room and to keep them regularly updated and should be given the opportunity to sp eak to the medical staff especially for relatives of critically ill patient and unconscious patients. We must listen to the patients and carers. Their input should be actively sought and not rebuffed. According to Wicker ONeil 2006, we are expected to communicate and give information in a caring, sensitive, friendly and considerate manner and should endeavour to create an atmosphere of confidence and trust when communicating with patients and their families. Careful attention to the evaluation of the airway, antacid pre-treatment and all required preparation for a potentially difficult airway was done for Mrs. G in the preoperative period. It is recommended that from 16 weeks gestation patients undergoing general anaesthesia should be given prophylaxis against aspiration pneumonitis. This usually includes a non-particulate antacid such as sodium citrate 30ml and an H2 receptor antagonist e.g. Ranitidine 50mg intravenously (Yentis et al 2007). Whilst positioning Mrs. G on the operating table, a left lateral inclination of between 15 30 degrees was made. Otherwise, a wedge under the right buttock may be used to minimise aortocaval compression as stated by Aitkenhead Smith (1990). Pre oxygenation was given as it is crucial and should be with a firm fitting mask for at least 3 minutes. As said by Pinnock et al (2003), General anaesthesia involves administration of drugs with possible effects on the foetus. Drugs with good safety records du ring pregnancy were used like Thiopentone, an induction agent, Suxamethonium which is a fast-acting muscle relaxant, Phenylephrine, a vasopressor to increase blood pressure and Metaraminol which is a sympathomimetic used to prevent and treat hypotension (Ponte Green 1994). Drugs that might increase uterine tone like Ketamine and beta-blockers should be avoided (BNF 2010). Obstetricians would request perioperatively, prophylactic tocolytic drugs such as Magnesium Sulfate, Terbutaline and Nifedipine, in order to prevent premature labour. Beta-adrenergic agonists such as Terbutaline are commonly used although their efficacy is vague and may affect maternal tachycardia and pulmonary oedema as stated by Campbell Spence (1997). Recent evidence suggests that calcium-channel blockers like Nifedipine may be effective with a better safety report in line with Simpson Popat 2002. In general, the fewer drugs used overall the better. Drugs such as non-steroidal anti-inflammatory drugs or NSAID s given near to labour may cross the placenta thereby averting the ductus arteriosus to close in relation to Moules Ramsay (2008). I explained to Mrs. G that a rapid sequence induction will be done for her safety and this is by applying a gradually increasing pressure on her neck specifically on the cricoids area. This is also known as Sellick manoeuvre. Intubation might be difficult and so adjuncts for a difficult intubation have been prepared. The operating department practitioner stood behind me whilst coaching me. Suction apparatus was available close at hand, laryngoscope and endotracheal tube was prepared, lubricated and a syringe was attached to the cuff. I did a careful cricoid pressure whilst handling the bougie with the endotracheal tube, but she could hardly see the airway hence, the anaesthetist asked for a guedel oral airway and ventilated her. Later she asked for an Airtraq, which is a disposable laryngoscope with a built-in camera for easy view of the airway. Again, it was difficult. Finally, a fibreoptic scope was used until a successful intubation was achieved. Once the airway was secured, ventilation intended to keep the PCO2 in the standard range for her pregnancy. The MAC or minimum alveolar concentration of volatile anaesthetic was reduced. The foetal heart rate was monitored preoperatively and postoperatively but intraoperatively, it has been difficult as the surgery was abdominal. Along with Allman Wilson (2006), the main concerns of the anaesthetist caring for Mrs. G are the physical response relating to the cardiovascular, respiratory, central nervous and gastrointestinal systems. Stoelting Miller 1994 pointed out that physiological and anatomical changes arise in the respiratory system all throughout pregnancy is due to hormonal and mechanical factors. In accordance with Drain (2003), dyspnoea is always common in pregnancy and oedema of the mucosal airway makes the view at laryngoscopy poor. According to Avidan et al (2003), cardiac output is increased roughly by 40%, and as early as 12-13 weeks, the gravid uterus constrict the lower vena cava when the woman rests flat on her back. Obstruction of the aorta may occur and result in diminished placental blood flow. This is very important when positioning a pregnant patient on the operating table as it can lead to profound hypotension. In severe hypotension and foetal bradycardia patient is turned to the left lateral position Yentis et al (2007). Increased in gastric regurgitation and aspiration might happen during induction of general anaesthesia as stated by Davey Ince 2000 therefore, a rapid sequence induction is obligatory when inducing general anaesthesia. Primarily, blood and oxygen flow must be given to both mother and foetus in order for surgery to be safe Gwinnut (2004). Accurate monitoring, recording and interpretation of any baseline measurement and any subsequent physiological measurement that fall outside of normal limits should be observed. Any fall in blood pressure, oxygen saturation, pulse, respiration, and foetal heart rate should cause alarm for the team. Doctors and anaesthetists must be cautious when operating on pregnant women because of the possibility of a preterm labour which should be observed postoperatively. The surgery has finished and went well. Mrs G was extubated awake and on her side to cut the risk of aspiration of gastric contents. She was transferred immediately to the Recovery and her hus band was informed. I think having both myself and Mrs. G and her family a greater understanding of their condition, treatment, care and the risks of treatment will help alleviate their fears and anxieties. The patient will be satisfied as she understands what is being done to her, therefore, there will be improvement in the overall outcome, speed of recovery, health, and patient experience. The whole team has done their part well and everything for the safety of both the mother and foetus. Pregnant women assumed of having appendicitis are often misdiagnosed and undergo unnecessary appendicectomies which result in early delivery or loss of the foetus. After careful reflection, I strongly believe that there is a need to require more precise diagnosis to avoid needless operations and unfavorable fetal loss. One straightforward solution that I can say is the use of advanced imaging tools, such as ultrasound and magnetic resonance imaging in order to increase diagnostic accuracy. Mrs. G was lucky not because of having a genuine inflamed appendix which has not ruptured so far but the diagnosis was accurately and immediately made through an ultrasound. Preterm labour was also prevented because of the necessary precautions that the whole team has contributed. Number of words: 1, 592
Wednesday, September 4, 2019
Jaws: The Movie versus the Book Essay example -- essays research paper
Summary by Eric Dillon Steven Spielberg’s Jaws was a branch off the novel Jaws written by Peter Benchley . The Novel was written in 1974 receiving a best sellers award and therefore setting up for a movie just one year later in 1975, which soon invented the phrase â€Å"blockbuster†which simply is to gross over 100 million dollars. Since this was a highly publicized and successful novel Steven Spielberg was held to a high expectation for this movie to be an ultimate hit. The book and the movie have a lot of differences. The book gives you an all around synopsis on every character while the Movie gives you a breath description on what the character was about and more emphasis on the shark. The title Jaws, is of course an innuendo referring to the shark. The opening credits start off by putting you deep in the treacherous waters of Amity moving along with an object that you assume is the shark but don’t officially know because of the camera position. The camera puts you in the depths of the water with the shark giving the viewer an extra edge when they witness a character jump into the water ignorantly. The fact that we know something that the character obviously doesn’t creates an uncanny feeling of wanting to warn or yell at your television. This type of cinematography is what enhances our viewing experience in a way that a book cannot do as effectively. On the contrary the books gives our main character, Chief Brody, a since of insecurity and worry while in the movie there isn’t enough time for us to sit and go into everyone’s background. Being able to cover more information and still keep viewer/readers attentive is something that is much more actively represented by a book. The most important sequences in the book sta... ...k cant nearly provide the same fear as actually seeing the water and waiting for the shark to jump out and decapitate someone. Steven Spielberg also left us guessing because as the movie went on we got to see more and more of what the shark looked like until WHAM! The shark jumps out of the water and leaves at our seats to enjoy a blood-splattering finale. While reading the book I kept going and going waiting to get to a spin tingling conclusion and then all I read was how the shark suddenly floated away. I felt teased as if a girlfriend kissed you all over and left you there to stay with no action for the night! Part of it was the fact that I saw the movie before I read the book so my expectations were very high for the book seeing that Jaws is a classic. Overall I think Jaws is one of the few times that the movie actually beat the book by a very long shot.
Tuesday, September 3, 2019
Blue Sky Marketing :: Essays Papers
Blue Sky Marketing FilmWatch Division Marketing Plan Trey's Best Opportunity to Dominate Market Research for the Film Industry How To Use This Report Template Change the information on the cover page to contain the information you would like. For the body of your report, use Styles such as Heading 1-5, Body Text, Block Quotation, List Bullet, and List Number from the Style control on the Formatting toolbar. This report template is complete with Styles for a Table of Contents and an Index. From the Insert menu, choose Index and Tables. Click on the tab you would like. Be sure to choose the Custom Format. XE indicates an index entry field. The index field collects index entries specified by XE. To insert an index entry field, select the text to be indexed, and choose Index and Tables from the Insert menu. Click on the Index tab to receive the Index dialog box. You can quickly open the Mark Index Entry dialog box by pressing ALT+SHIFT+X. The dialog box stays open so that you can mark index entries. For more information, see Indexes in Help. In addition to producing reports, this template can be used to create proposals and work-books. To change the text or graphics, the following suggestions are provided. Â · Select any paragraph and just start typing. Â · To save time in the future, you can save the front cover of this report with your company name and address. For step-by-step instructions on how to perserve your changes with the template, please read the following section. How To Modify This Report To create your own version of this template, choose File New and select this template. Be sure to indicate "template" as the document type in the bottom right corner. 1. Insert your company information in the name and your address in the frame in the upper right corner of the cover page. 2. Choose File Save As. At the bottom of the menu, choose Document Template in the Save File as Type: box. Save the file under a new name to protect the original, or use the same name to replace the existing version. To create a document, choose File New and choose the template you just created. Assuming you followed the steps above, your company information should appear in place. How to Delete Graphics To delete a graphic, click on each object (in Page Layout View) to select, and press Delete.
Monday, September 2, 2019
Essay --
Genetically Modified Plants and its Impacts Biotechnology, a merging of biology and technology, has greatly contributed to our current well-being. Scientists employ biotechnology to develop medicinal treatments, alternative energy, and agricultural products. Its advances also enable scientists to alter organisms through genetic engineering, a biotechnological technique, involving modification of DNA and the transfer of gene components between species to promote replication of specific traits. Scientists apply this technique to a wide range of organisms including plants. Genetically modified plants (GM), namely transgenic plants, contain traits such as better nutritional quality, tolerance to insecticide and diseases, and greater yield. These GM crops impose benefits on human health, environment, and economics. However, a number of scientists and organizations criticize GM crops despite its advantages. The opposition argues that GM crops put potential risk on not only human health but also the environment, leading to increasi ng use of herbicide and allergic reaction in some people. Evidence regarding GM crops controversy reveals how biotech companies suppress research that would otherwise reveal adverse effects of transgenic plants to the public. Genetic engineering is a modern biotechnology technique, which allows gene slicing and transferring between one organism and another. This altered genetic make-up results in the change of certain protein production that indirectly removes or adds certain features to modified organisms. Genetic modification differs from traditional biotechnology because genes of animals, plants, and bacteria can be combined to create organisms with altered traits that would not occur naturally. This tech... ...n manipulating and limiting independent research on GM plants clearly undermines the credibility of information obtained through research institutions funded by these companies. The majority of published researches has shown potential benefits of GM plants in producing more nutritious foods, decreasing use of insecticide, and increasing farmers’ profits. However, there is a tendency that these studies are conducted in favor of biotech companies. The studies on GM plants’ negative impacts are still scarce due to manipulation by biotech companies. Due to the lack of independent scientific research on the impacts of transgenic plants, it is crucial for consumer to have the right to choose whether they want to consume GM plants or not. To do so, GM labeling law must be passed. And it can only be done if more consumers participate and support the GM labeling movement. â€Æ'
Sunday, September 1, 2019
Corporate Strategies to Hedge Commodity Price Risks Applying
Table of contents List of abbreviationsIII List of figuresIII List of tablesIII 1Introduction1 1. 1Problem and objective1 1. 2Structure of this paper1 2Background Information2 2. 1Definitions of fundamental terms2 2. 2Commodity price risk in different firms2 3Explanation of derivatives3 3. 1Options3 3. 2Futures4 3. 3Forwards6 3. 4Swaps6 4Hedging strategies with derivatives7 4. 1Hedging with options7 4. 2Hedging with futures7 4. 3Hedging with forwards8 4. 4Hedging with swaps8 5Pros and cons of hedging strategies with derivatives8 5. 1Pros and cons of options9 5. Pros and cons of futures9 5. 3Pros and cons of forwards10 5. 4Pros and cons of swaps10 6Practical example of corporate commodity price risk hedging10 6. 1Introduction on firm's practical hedging strategy10 6. 2Analysis on this strategy11 7Summary12 Appendix13 Appendix 1: Amounts outstanding of over-the-counter (OTC) derivatives by risk category and instrumentâ€â€Ã¢â‚¬â€in billions of US dollar13 Appendix 2: Derivatives fi nancial instruments traded on organized exchanges by instrument and locationâ€â€Ã¢â‚¬â€in billions of US dollar14 Bibliography15 Internet Source16 List of abbreviations CHClearing HouseIMInitial Margin MBMargin Balance MM NMaintenance Margin No OTCOver The Count VM YVariation Margin Yes List of figures Figure 1: Structure of this paper2 Figure 2: P of each option position4 Figure 3: Flow chart of marking-to-market process5 Figure 4: P of each future position6 Figure 5: Hedging model on fuel oil of Air China11 List of tables Table 1: Summary for 4 option positions4 Table 2: Summary for future positions6 Table 3: Summary for 4 derivatives9 1Introduction 1. 1Problem and objective The risk of commodity price is a ferocious topic in corporate operation.Corporate profit is equal to total revenue minus total cost. For firms, because of the high volatility on commodity price, their inputs and outputs relating to commodity are unpredictable. As a consequence corporate profit will be imm ensely volatile, which will possibly lead the firm to go bankruptcy if no any preventive actions are taken. For example, producers of commodities probably need to assume unexpected losses, when the price of outputs goes down or the price of necessary raw materials goes up. The situations are similar to wholesale buyers, retailers, exporters and even governments.Volatility of commodities price has great impacts on corporate daily operation. The objective of this term paper is to introduce derivative hedging strategies for corporate managers to reduce or even eliminate future unpredictability, mainly from the perspectives of the role commodity price risks play, what the typical derivative instruments are, where and how to apply these different derivatives in terms of hedging principles thereof, and both advantages and disadvantages when applying each derivative in real business transactions. 1. Structure of this paper Firstly, this term paper highlights problems existing in real world . Secondly, it introduces advanced derivatives theory that can be applied to solve these problems. Thirdly, specific details on the theory will be presented, including explanation, application, as well as pros and cons of each derivative instrument. Then, an example is analyzed to show how companies apply derivatives to hedge commodity risks practically. Last is a summary of this term paper. Following figure shows the body of this paper. 2Background Information 2. Definitions of fundamental terms In financial markets derivative is a contract or security whose value is derived from the value of other more basic underlying variables . One of its most important functions is hedging. In corporate operation, hedging is to secure the companies against potential loss caused by variable risks that arise in international market, such as the commodity price risks. In this paper, commodity means any tangible goods or raw materials that may be sold or traded in the markets, such as energy, gold , or agricultural products. 2. Commodity price risk in different firms Volatility of commodities price influences firms’ daily operation significantly. Producers of commodities, such as farms, oil producers, mining companies, face price risk on output. Wholesalers and retailers, face price risk during the time period from buying from suppliers and selling to customers. Exporters, face the same price risk as well as currency exchange risk. And governments face price and yield risks generating from tax revenues that depend on firms’ operational conditions. 3Explanation of derivativesDerivatives are traded in exchange-traded markets and over-the-counter markets. (See recent derivatives transaction status in appendix 1 and appendix 2. ) Notably, exchange-traded derivatives are default risk free and liquid. However over-the-counter traded derivatives are the opposite. 3. 1Options An option is the contract that gives the buyer the right but not obligation to buy (call option ) or sell (put option) an underlying asset at a predetermined price (exercise price) for certain quantity during a fixed period of time (maturity).The buyer of the option pays a particular amount of money (option premium) to the seller to buy a right whereby he can decide whether or not to exercise this option, simultaneously the seller has the obligation to perform if the buyer exercises the option. European options only can be exercised on expiration day, and American options can be exercised at any time before maturity. The buyer of the call option is named long call, while the seller of the call option is named short call. Similarly, the buyer of the put option is named long put, while the seller of the put option is named short put.In commodity market, underlying of commodity option is a commodity, such as oil, wheat, or gold. Commodity options are both exchanges-traded and OTC traded. Following figure shows P of each option. Following table is the summary for these 4 option po sitions. Table 1: Summary for 4 option positions Market price expectationMaximum profitMaximum lossBreakeven point Long callupunlimitedoption premiumexercise price + option premium Short calldown or stableoption premiumunlimitedexercise price + option premium Long putdownexercise price – option premiumoption premiumexercise price – option premium Short putup or stableoption remiumexercise price – option premiumexercise price – option premium Source: author’s own. 3. 2Futures A future is a contract between two parties to buy or sell a specified amount of asset at a specified time period in the future for a certain price. Normally there are two types of futures, commodity futures whose underlying are commodities and financial futures whose underlying are financial assets. They are highly standardized, regulated, and traded in exchange markets with highly liquid and default risk free property. Because of the marking-to-market process, at maturity the settling price is the spot price at expiration date with profit gaining or loss paying from a margin account, which indirectly makes the effective bargain price equal to the predetermined price in the future contract. Notably, to ensure high liquidity of futures, marking-to-market process plays a significant role. The following figure shows the marking-to-market process. Generally there are two alternative ways at maturity to settle futures, either by cash or by actual delivery of underlying, which is clearly defined by futures exchange.Following figure and table show the details of a future. Table 2: Summary for future positions ?Maximum profitMaximum lossBreakeven point Long positionunlimitedexercise pricespot price + cost of carry Short positionexercise priceunlimitedspot price + cost of carry Source: author’s own. 3. 3Forwards A forward contract is a customized and over-the-counter agreement to buy or sell an asset at a specified time in the future for a specified price, where a long position has the obligation to buy and a short position has the obligation to sell. Compared with futures, no marking-to-market process are required.Counterparties can negotiate with each about the parameters of the contract. As a result, a firm who wants to make forward contract needs to find the counterparty by itself. 3. 4Swaps A swap is a customized and over-the-counter agreement to exchange a series of specified assets periodically in the future. Normally the counterparties of a swap contract are a large institution such as a bank and a company. Basically, we can view a swap as a complicated forward. Except currency swaps, counterparties just need to pay the differences between the cash flow they should exchange. Because swaps are bespoken as a result they are less liquid.There are commodity swaps, interest rate swaps and currency swaps. Interest rate swaps is an agreement of two counterparties to change fixed interest and floating interest on predefined nominal pr incipal in the future periodically. Commodity swaps normally vary tremendously among different markets. In a currency swap, counterparties change same value of different currencies in inception and termination, where the exchange rate of the tow currencies depends on the negotiation of counterparties. 4Hedging strategies with derivatives This chapter will focus on the principles of hedging strategies on commodities. . 1Hedging with options If a trader wants to procure a commodity with high volatile price, he can buy a commodity call option to hedge the price risk of going up. Similarly, if a company wants to sell a commodity product, it can buy a long put to hedge the price risk of going down. In practice, because investors want to bet more precisely on the future price of the underlying, and hedgers with long positions want to save option premiums, a few combinations of options come out, such as a long call and a short put with identical parameters except the different strike price . 4. 2Hedging with futuresWhen the objective of a commodity trader wants to neutralize the price risk as far as possible, usually he will choose to take a position on a future on commodity. A hedger who already owns a commodity asset or doesn‘t own right now but will at some future time expecting to sell it in the future without assuming any price risk, he can apple future hedging strategy to enter into a short position to become a short. Likewise, a hedger who has to buy a certain commodity asset in the future and wants to lock in spot price immediately, he can apply a future to enter into a long position to become a long. . 3Hedging with forwards The principles of hedging strategy with forwards are similar with futures'. Whether to use futures or forwards depends on different requirements. Generally, financial assets investors who need high liquidity prefer to choose futures, while commodity investors such as producers who need high customization prefer to choose forwards. 4 . 4Hedging with swaps When investors want to hedge risks of interest rates, currencies, or commodities, they can use swaps. In gold swaps, counterparties change fixed lease rate with variable lease rate.In swaps on base metals, counterparties change fixed metal price with average price of near dated metal future. In oil swaps, counterparties change fixed West Taxes Intermediate (WTI is a benchmark in oil price) price with average price of near dated WTI future. 5Pros and cons of hedging strategies with derivatives The following integrated summary of these derivatives depending on pervious analysis makes systematic comparisons. (The options here are exchanged-traded European options) Table 3: Summary for 4 derivatives SUMMERY OF DERIVATIVES FOR GENERAL TYPES OptionsFuturesForwardsSwapsTypes of contractstandardizedstandardizedcustomizedcustomized Settlementscash and deliverymost cash and few deliverydeliverydepends on individuals Trading marketExchange tradedExchange tradedOTCOTC Liqu idityhighhighlowlow Marketing-to-marginnorequirednono Time of settlementmaturitydailymaturityperiodically Initial investmentoption premiuminitial margin nodepends Default risk assumed byClearing houseclearinghouseBoth partiesBoth parties ProsDefault risk free & liquiditycustomization & no initial investment Consinitial investment & inflexibledefault risk for both party & illiquidity Source: author’s own. . 1Pros and cons of options The pros of options are obvious. Firstly, they have no risk to assume more loss than premium but have possibility to get unlimited potential profit. Secondly exchanged-traded options are highly liquid and OTC traded options are flexible. However, the cons of options are also explicit, such as the difficulty to decide when to enter into a long position.Because buying an option needs to pay option premium, if the spot price cannot go above (for a long call) or go below (for a long put) the breakeven point the hedger will suffer a loss, and depends on statistics the possibility of a long position to lose is about 66%. 5. 2Pros and cons of futures It definitely makes sense for most companies whose majors are in businesses but not professional in forecasting the price of commodities price volatility, which can make them pay more attention on their core competences instead of fearing about volatile price.Nonetheless, taking neutralized strategies make hedgers give up the possibility of both profit and loss. Moreover, instead of hedging risks by companies, shareholders can hedge themselves according to their preferences. Additionally, if other competitors of the same industry don’t apply hedging strategies, in fact, it is the hedging company itself that assumes risks, because competitive pressures are the same for other all competitors but different for the hedging company its own. 5. 3Pros and cons of forwards Basic pros and cons have been listed in the table in front of this chapter.Generally, compared to futures, the most explicit pro is that forwards are highly customized and therefore the con is that they are hardly liquid. 5. 4Pros and cons of swaps Basic pros and cons have been listed in the table in front of this chapter. Gernally, compared to futures and forwards the most precise pros is that both counterparties could reap benefits from a swap, such as in a currency swap where a firm with a low rate may get a cheaper loan as other firms with high rates, and the counterparty may get a payment as compensation.However the corresponding cons is that counterparty may need to pay commision to intermediary, because it is difficult to find an appropriate counterparty by itself. 6Practical example of corporate commodity price risk hedging 6. 1Introduction on firm's practical hedging strategy Air China is an airline company, whose cost of fuel oil occupies 44. 75% of total revenue in 2008. To hedge the fuel oil price risk, Air China bought a call option with strike K1, meanwhile sold a put option with st rike K2, where K1
Subscribe to:
Posts (Atom)