All gemstones, including diamonds, are weighed in metric carats.  One carat, equal to 0.2 grams, weighs about the same as a paperclip.  Now, do not confuse carat with karat, which is used for gold and refers to purity.

A carat is divided into 100 points, much like one dollar is split into 100 pennies.  So, when someone says that your diamond is 75-points, it weighs .75 carats (CT).  However, two diamonds that weigh .75 CT can have very different values, depending on their color, clarity, and cut.

How did the carat system start?
The carat is the standard unit of weight for all gemstones, and it earned its name from the carob seed.  These small seeds had a very uniform weight, and early gem traders used them as counterweights to balance the scales.  The modern metric carat has been used in the United States since 1913, and, soon thereafter, other countries followed suit.  Today, a carat is the same weight in every part of the world.

Diamonds are valued by how colorless they are — it is all about what you cannot see!  The less color present, the more valuable the diamond.  The exception to the rule is fancy colored diamonds, such as blues and pinks, which lie outside of the GIA rated color-range.

The majority of diamonds found in jewelry stores run from colorless to nearly colorless, with hints of yellow or brown.

GIA's color grading scale is the industry standard when it comes to diamonds.  The scale starts at the letter D, which represents colorless, and continues (with increasing presence of color) to the letter Z.  Diamonds are graded by comparing them to stones of known color under precise viewing conditions with controlled lighting.

Many color differences are so subtle to the untrained eye they appear to be invisible.  However, these slight distinctions make a very large difference in diamond quality and thus affects price.

Because diamonds were formed deep within the earth, under extreme heat and pressure, they often contain unique birthmarks, either internal (inclusions) or external (blemishes).

Clarity refers to how absent those inclusions and blemishes are in the diamond.  Gems without such birthmarks are rare, and that rarity greatly affects a diamond's value.  Using the GIA International Diamond Grading System™, the clarity of the diamonds range from flawless, FL, to included, I3.  Those at the bottom end of the scale have obvious inclusions, visible to the naked eye.

Every diamond is unique; none is absolutely perfect when magnified 10x, although some come close.  Those that come close are known as flawless diamonds, and they are exceptionally rare.  They are so rare that the majority of jewelers have never seen one.

There are 11 grades on the GIA Clarity Scale, with most of the world's diamonds falling into the VS (very slightly included) or SI (slightly included) categories.  The GIA system considers size, nature, position, color, and number of clarity characteristics when determining clarity grade.

Flawless (FL): No inclusions or blemishes are visible to a skilled grader using 10× magnification
Internally Flawless (IF): No inclusions and only blemishes are visible to a skilled grader using 10× magnification
Very, Very Slightly Included (VVS1 and VVS2): Inclusions are difficult for a skilled grader to see under 10× magnification
Very Slightly Included (VS1 and VS2): Inclusions are clearly visible under 10× magnification but can be characterized as minor
Slightly Included (SI1 and SI2): Inclusions are noticeable to a skilled grader using 10× magnification
Included (I1, I2, and I3): Inclusions are obvious under 10× magnification and may affect transparency and brilliance

The cut of the diamond is what fuels the fire, sparkle and brilliance.

Though it is very difficult to analyze or quantify, the cut of any diamond has three attributes: brilliance (the total light reflected from a diamond), fire (the dispersion of light into the colors of the spectrum), and scintillation (the flashes of light, or sparkle, when a diamond is moved).

Understanding the diamond cut begins with the shape.  The standard round brilliant is the common shape in most diamond jewelry.  The rest of the cuts are known as fancy shapes.  Traditional fancy shapes include the marquise, oval, emerald, and pear cuts.  Gaining popularity are hearts, cushions, and triangles, among others.

When it comes to value, though, cut refers to the diamond's symmetry, polish and proportions.  For example, take the side view of the standard round brilliant.  The major components, from top to bottom, are the crown, girdle, and pavilion.

A round brilliant cut diamond has 57 or 58 facets.  The top facet of the diamond is referred to as the table.  The proportions of the diamond refer to the relationships between table size, crown angle, and pavilion depth.  There are many combinations possible within proportion, and that wide range is the ultimate factor in the stone's interaction with light.