I wouldn't say it is not a derivative, CFD is for sure a derivative, you don't need any secondary market to be traded with CFDs to make it a derivative. So it is a derivative, only problem is, there are many companies issuing them and if they go bankrupt, you can lose your money. Most companies offer just a few of CFDs though, but some like ETX Capital for example (http://trade-test.com/etx-capital-review) offers around 6000 of CFDs, biggest offer that I am aware of.
An advantage of CFDs is that it can be much cheaper than its base asset as spread is made by the issuing company that can be any broker like that ETX Capita, or Plus500 or Oanda or whatever. And they can sell you CFD with a fraction of spread you would normally pay on a regular market. So conclusion:
- Risky: yes, somewhat.
- Cheaper: yes.
- Do you own asset: no.
- Do you get dividends: yes.