A diamond's cost is based on the characteristics known as the "4 C's": Clarity, Color, Cut and Carat Weight.
Practically all diamonds contain naturally occurring internal characteristics called inclusions.The size, nature, location and amount of inclusions determine a diamond's clarity grade and affect its cost. The clarity scale ranges from flawless (FL), meaning a gemstone has no internal or external flaws, to severely included (I3), meaning there are many flaws clearly visible to the unaided eye.
FL-IF No inclusions visible (by an expert) under 10X magnification (FL=Flawless, IF = Internally Flawless)
VVS1-VVS2 Minute-extremely difficult to find under 10X (VVS = Very, very slight inclusions.)
VS1-VS2 Minor-difficult to find under 10X (VS-Very slight inclusions.)
SI1-SI2 Noticeable, relatively easy to find under 10X (SI - Small inclusions.)
I1-I2 Obvious under 10X - just visible to the naked eye (I1 = Imperfect.)
Most diamonds, although appearing colorless, actually have slight tones of yellow or brown. As these tones become more easily apparent, the rarity and the cost decrease.
Cut refers to the proportions, finish, symmetry, and polish of the diamond. These factors determine the brilliance and sparkle of a diamond.
The Ideal Cut
The Ideal Cut Diamond describes a round brilliant diamond that has been cut to exact and mathematically proven proportions. Its symmetry, with 58 exactly placed facets, produces the ultimate in lustre and beauty.
When a diamond is cut to the ideal proportions, all of the light entering from any direction is totally reflected through the top and is dispersed into a display of sparkling flashes and rainbow colors.
A Premium Cut Diamond demonstrates subtle variations from the Ideal Cut. Although dimensional differences affect a diamond's reflection of light, a Premium Cut still achieves a harmonious balance between it's proportions and the display of brilliance.
Most diamonds are "spread" in their cutting to retain maximum weight from the original rough. A heavier diamond will result, but at a dramatic sacrifice of potential fire and brilliance.
Light entering the diamond reflects internally from facet to facet and its reflected back through the top ONLY, creating maximum brilliance.
When a diamond is cut too deep, light* leaks out of the bottom, brilliance is lost and the center of the diamond will appear to be dark.
When a diamond is cut too shallow, light* leaks out of the bottom, brilliance is lost and the diamond appears watery, glassy and dark.
The weight of a diamond is measured in carats. One carat is divided into 100 parts called "points," 1ct = 1.00; 1/2 ct. = .50. The value of two diamonds of the same weight can vary greatly depending on the color, clarity and especially the cut. Below are two identical pieces of rough, (uncut diamonds) each of the same quality and value.
Ideal and Premium Cut Diamonds
Example 1. From one piece of rough a diamond has been cut to Ideal proportions, retaining a weight of one carat. The light is totally reflected through the top.
Inferior Cut Diamond
Example 2. The second piece of rough has been "spread" in its cutting, resulting in a diamond weighing approximately 1.40 ct. Note: The girdle is thicker, the table is much larger, the angles are exaggerated, all at the expense of the diamond's ability to reflect light.
Therefore, one can see that the value of a diamond can vary as much as 40% in the cutting alone.