"Synthetic Derivatives" are derivatives that imitate the underlying asset while changing important aspects such as the price calculation at the same time. Synthetic Derivatives are complicated products because of the complicated methods required to calculate their prices, and they allow traders to speculate on price fluctuations without holding any of the underlying assets. Contracts are used for trading synthetic derivatives, which means you take out a specific number of contracts, each of which is equal to a certain quantity of the underlying asset.