Derivatives trading methods that use a variable order price and a hedge transaction

A method of hedging risks associated with the purchase of a variable defined derivative product that has a variable defined order price, the method comprising:

• (a) executing by a match system a transaction based on an order for a variable defined derivative product that has a variable defined order price;
• (b) receiving order risk data from an order risk management module;
• (c) using a best efforts approach to locate a potential hedge transaction that corresponds to the derivative product order;
• (d) comparing data of the potential hedge transaction to the order risk data;
• and
• (e) executing the potential hedge transaction when a rule is not violated;
• wherein the variable defined order price of the derivative product is a function of an original order price, an updated price of an underlying product and at least one price determination variable value based on a predetermined formula received at the match system.