Cut refers not to a diamond's shape (e.g. round, oval, pear, etc.) but to a diamond's proportions, symmetry and polish. The beauty of a diamond depends more on cut than any other factor. Though extremely difficult to analyse and quantify, diamond cut has 3 primary effects on appearance: Brilliance (the brightness created by the combination of all the white light reflections from the surface and the inside of a polished diamond), Fire (the dispersion of light into the Colours of the visible spectrum, seen as flashes of colour), and Scintillation (the flashes of light and dark, or sparkle, when a diamond or light source is moved).

When a diamond is fashioned from a rough stone, the cutter must balance optimal cut (and therefore appearance) against maximum yield (cutting the diamond to maintain as much carat weight from the rough stone as possible). Because many customers are willing to pay more for a larger, fair-cut cut diamond than for a slightly smaller, well-cut diamond, there is pressure on the cutter to sacrifice appearance for weight. This is why the Cut grade is so important; it allows the purchaser to identify those stones that were cut Fair to Poor in an effort to gain carat weight.

Diamond proportion refers to the relationship between the size, shape, and angle of each facet of a diamond. A wide range of combinations are possible, ultimately determining the diamond's interaction with light.

When light strikes a diamond, approximately 20% immediately reflects off the surface (as glare). Of the 80% that enters, a portion will escape through the bottom of the diamond (where the observer cannot appreciate it). A well proportioned diamond will have each facet properly placed and angled so as to maximize the amount of light that reflects back out of the crown (top) of the diamond, to the eye of the observer. This reflected light is perceived as scintillation, fire and brilliance.

Most gemologists agree that the best cut diamonds are those that follow a set of formulae calculated to maximise brilliance. These formulae can be seen in a diamond's proportions, most importantly how the depth compares to the diameter, and how the diameter of the table compares to the diameter of the diamond.

However, the variance in the proportions between an Ideal Cut and a Poor Cut can be difficult to discern by the casual observer. Because cut is so important, several grading methods have been developed to help consumers determine the cut of a particular diamond. In general, these grades are:

This cut is intended to maximise brilliance, and the typically smaller table sizes of these diamonds have the added benefit of creating a great deal of dispersion or 'fire' as well. Ideal quality diamonds are truly for the person who enjoys knowing that he has one of the finest things that money can buy. This category applies only to round diamonds.

These diamonds reflect most of the light that enters them, creating a good amount of brilliance. With these diamonds, the cutters have chosen to stray slightly from the preferred diamond proportions in order to create a larger diamond.

The result is that these diamonds fall slightly outside of some customers' preferences in terms of, for example, table size or girdle width, though in many cases, many of the parameters of diamonds in this range will overlap with certain parameters of diamonds in the Ideal or Premium ranges. Generally, the price of these diamonds in slightly below that of Premium cuts.

In the case of round diamonds, many Premium Cut diamonds have cuts that are the equal of any Ideal Cut diamond, though they often can be purchased at slightly lower prices than Ideal Cuts. They are intended to provide maximum brilliance and fire. Like the Ideal Cut, these are also for the person who enjoys knowing that he has one of the finest things that money can buy.

Diamonds that reflect much of the light that enters them. Their proportions fall outside of the preferred range because the cutter has chosen to create the largest possible diamond from the original rough crystal, rather than cutting extra weight off to create a smaller Premium quality diamond. Diamonds in this range offer excellent cost-savings to customers who want to stay in a budget without sacrificing quality or beauty.

A diamond graded as fair or poor reflects only a small proportion of the light that enters it. Typically these diamonds have been cut to maximise the carat weight over most other considerations.

Diamond carat weight is the measurement of how much a diamond weighs.

A metric "carat" is defined as 200 milligrams.

Each carat can be subdivided into 100 'points.' This allows very precise measurements to the hundredth decimal place. A jeweller may describe the weight of a diamond below one carat by its 'points' alone. For instance, the jeweller may refer to a diamond that weighs 0.25 carats as a 'twenty-five pointer.' Diamond weights greater than one carat are expressed in carats and decimals. A 1.08 carat stone would be described as 'one point oh eight carats.'

All things being equal, diamond price increases with diamond carat weight, because larger diamonds are rarer and more desirable. But two diamonds of equal carat weight can have very different values (and prices) depending on the other diamond 4Cs: Clarity, Colour, and Cut.

The average size of most engagement-ring diamonds is somewhere between one carat and half a carat.

Do not confuse carats with karats, the unit of purity for gold.

The modern carat system started with the carob seed. Early gem traders used the small, uniform seeds as counterweights in their balance scales. The carat is the same gram weight in every corner of the world.

The word "carat" was possibly derived from the Greek word kerátion literally meaning a small horn, and refers to the carob seed as a unit of weight.

Some weights are considered "magic sizes" – half carat, three-quarter carat, and carat.

Visually, there is little difference between a 0.99 carat diamond and one that weighs a full carat.But the price differences between the two can be significant.