1.It developed because traders wanted to trade with stocks without owning the stock, but in order to gain from the stock’s movements.
2.Traders wanted to trade without paying commissions.
3.The CFD provides a leverage for trading. A leverage is a frame which gives traders the ability to increase their contract size and to win or lose from relative small price movement.
4.With CFD trading, traders can make a short sell or call and there is no borrowing or shorting cost.
5.Spread- in Derivative there is not spread, the prices are fixed. In CFD, the prices change according to the markets’ quote. Therefore, the selling price and the buying prices are different.