The most common usage of diamonds today is as gemstones used for jewelry. When buying a diamond you should always have four factors (four Cs) in the mind. These four Cs are Cut, Color, Clarity and Carat. Majority of gem diamonds is traded on the wholesale market based on single values for each of these 4 factors. To set expected price range you need to know all four factors and consumers that are purchasing individual diamonds are often advice to use the 4 Cs in order to buy diamond that is just right for them. However although main characteristics of each diamond are described with four Cs you also need to consider some other characteristics, for instance presence of fluorescence of individual diamond and even history of the diamond (its previous owners and its source).
Evaluation of gemological institute is another contributing factor that affects diamond’s price. Most recognized gemological association is Gemological Institute of America (GIA). GIA has long history in performing evaluations on diamonds because they were first laboratory in America to issue modern diamond reports and evaluations and are known for their consistency. Evaluation is very important especially when judging color and clarity because here is very much needed professional assistance and experienced eye unlike carat weight and cut angles that are mathematically defined. Among other highly judged evaluation societies are also American Gemological Society and Diamond High Council located in Antwerp, Belgium. Antwerp is the major city of world's diamond industry. So let us begin with four CS.

CARAT
As it was already mentioned, diamonds were first discovered in India. The first unit of weight that was used for the diamonds was the carob seed or to be more precise the weight of the seed from the seed pod of the carob or locust tree was equivalent to a 1,00 carat diamond. Today weight of the diamonds is measured in carats and one carat is defined as 200 milligrams.
Here is important to say that diamonds weight is related but is not the same as its size because two diamonds with same shape, with equal carat weight, clarity and color that were cut from the same rough could have different size depending of proportion of each of these two diamonds where better cut diamond will look bigger than the one that wasn’t cut that good. The price per carat isn’t increasing in exact proportion with its size. Diamond prices in fact go up exponentially with carat weight because demand is much bigger for diamonds that are weighing more cause they are very rare to find. For instance doubling the carat weight from one carat to two carat will raise the price more than two times, and this is even more expressed when one diamond’s weight is under one carat and one just above one carat because the one just under 1,00 carat (for example 0,95) will have significantly smaller price than the one that is just above 1,00 carat (for example 1,05) all because of difference in demand. This is all because in average half of diamond gets lost when cutting, which means that for larger cut diamond, larger rough diamond is required and therefore the price increases most steeply with carat.
In determining actual diamond’s price important role goes to Rapaport Diamond Report, which is weekly diamond price list that is published every week by Martin Rapaport, CEO of Rapaport Group of New York for different diamond cuts, clarity and carat weights. This weekly report is in fact baseline for retail-price because jewelers trade diamonds at negotiated discounts off the Rapaport Price. Phrase “total carat weight” or t.c.w. is also a much known phrase in the world of diamonds and describes total mass of diamonds in some piece of jewelry when more than one diamond is used. Total carat weight is widely used for diamonds earrings, diamond bracelets, diamond necklaces and other similar jewelry indicating the mass of all diamonds used in certain piece of jewelry.

CLARITY
Majority of the diamonds have internal defects known as “inclusions”. Clarity is measure of diamond’s inclusions. These inclusions can be crystals, structural imperfections or some foreign material that have as a consequence less light passing through diamond. If these inclusions are small or if there’s a few of them, more light can pass through the diamond, making it more beautiful and of course more expensive.
There’s no gemstone that can produce the amount of brilliance that diamond can. Diamonds that are free of inclusions are very rare and therefore very expensive. Clarity of each diamond depends on number, size, location and visibility of inclusions.
Clarity of individual diamond can be affected by two types of inclusions – External and internal. External inclusions are impurities on the surface of the diamond and the interior inclusions are impurities in the interior of the diamond (majority of internal imperfections is the result of breakage in the chemical structure of individual diamond.

Gemological institute of America and other organizations have developed systems to grade diamond’s clarity. Most common is the use of hand held loupe or microscope based on the 10-power magnification which generally speaking means that any imperfection that is not visible with x10 magnification isn’t really imperfection and isn’t considered while grading diamond’s clarity.
There are ten levels of grading scale from I.F which means internally flawless which is the best and all the way to the P.3-1.3 meaning heavy inclusion that are visible with naked eye. Small numbers of diamonds have good enough clarity to be used in jewelry pieces, only about 20 % of them while others are used in industry.
Although most inclusion isn’t affecting diamond’s structural integrity some inclusion like large clouds or large crack can cause unwanted consequences in form of lack of diamond’s ability to transmit and scatter light and may even completely reduce diamond’s resistance to breakage.


COLOR
Diamond’s color plays a key role in determining diamond’s value and beauty and this is the reason why sometimes jewelers set diamonds in groups of similar colors. The diamond color scale usually starts from D meaning best blue White to Z meaning dark colored diamonds. This scale has been widely accepted in almost all countries superseding some older scaling systems.
It’s also important to mention that professional grading labs judge color of individual diamond from the side of the diamond and not from the top. Diamonds graded D-F are considered "colorless", G-J are considered "near-colorless", K-M are "slightly colored", N-Y usually appear light yellow or brown.
Chemically speaking perfect diamond is perfectly transparent with no color, but in reality there’s no absolutely perfect diamond. Diamond’s color depends on chemical impurities and structural defects in crystal lattice of diamond.
Diamond’s color can detract or enhance its value which depends on the hue and intensity of diamond’s coloration which can have great effect on diamond’s price. For instance if there’s a detectable yellow hue in diamond this will increase the price of the diamond while on the other hand intense blue color will be much more expensive.
Majority of diamonds used in jewelry pieces are white diamonds. Nitrogen is the most common impurity giving diamond yellow or even brown color. Rarity is very important factor when talking about diamond’s color because for instance diamonds graded Z are rare and therefore expensive and so are bright yellow and some other colors.
Only yellow and brown hues are often, except earlier explained exceptions meaning that diamonds of all other colors are rarer and therefore more expensive. These colored diamonds are often labeled as “fancy” diamonds because of unusual colors of these diamonds. There’s also a rating system for this diamonds developed by gemologists although not in common use because of rarity of these diamonds.

CUT
Cut refers to the manner in which the diamond has been shaped, namely to the proportion, symmetry and finish of a polished diamond. The cut of certain diamond describes the quality and the skilled hand of the master cutter.
Cut gets often confused with shape because there are a number of traditional diamond’s shapes. Round brilliant diamond is the most popular shape. Round brilliant diamond if well-cut reflects the maximum light and sparkles more than any other used shape. Round brilliant diamonds are guided with mathematical guidelines for the ratios of angle and length in order to reflect maximum amount of light. Round brilliant diamond is the most expensive shape because 50 % of the rough diamond gets lost while cutting a round shape which is much bigger loss than other shapes.
Second most popular technique is known as “princess cut diamonds” which is a square shape. This technique is used rarely compared to round brilliant diamonds, because 80-85 % of diamonds gets cut to round brilliant and only 5-10 % are "princess cut diamonds".
Cutting technique is all about getting the better sparkle and is vital factor to visual impression of diamond. Diamond cutting is a technique that has been developed through many centuries with its greatest moments in person of Marcel Tolkowsky. This mathematician and gemologist developed the round brilliant cut when he calculated ideal shape to return and scatter light when watching diamond from above. This is the table of Tolkowsky’s perfect dimensions.
Tolkovsky defines ideal dimensions to have:
  • Table percentage (table diameter divided by overall diameter) = 53%
  • Depth percentage (Overall depth divided by the overall diameter) = 59.3%
  • Pavilion Angle (Angle between the girdle and the pavilion) = 40.75°
  • Crown Angle (Angle between the girdle and the crown) = 34.5°
  • Pavilion Depth (Depth of pavilion divided by overall diameter) = 43.1%
  • Crown Depth (Depth of crown divided by crown diameter) = 16,2 %

This ideal Tolkowsky’s dimensions have unfortunately very small area in which diamond can be considered perfect and any declination from these dimensions means less reflected light. Since today is a certain financial premium for a diamond that weighs 1,0 carat or more, many diamonds are being cut very poorly just to get pass this magical weight.

In order to achieve ideal, round brilliant diamonds aren’t allowed to have depth percentage that is bigger than 62,5 %, and overall diameter of typical round brilliant 1,0 carat diamond should be about 6,5 mm, because diameter of a round brilliant should be about 6,5 times bigger than the cube root of carat weight.
Of course, definition of ideal cut is sometimes very subjective and therefore controversial. Although this mathematical model of Tolkowsky was a real breaking point, it’s been superseded by the GIA Facetware software.
Some fancy cuts like baguette, marquise, briolette pear cuts are used too although they aren’t holding the same precise Tolkowsky standards and are great deal influenced with fashion.
Diamond cutters for instance prefer more princess cut style than the round brilliant because much less material is wasted in princess cut. Some cuts even include extra facets, although their improvement value compared to Tolkowsky's model stays doubtful.
Quality of the cut is by many considered to be most important thing when judging beauty of individual diamond because well cut diamond often appears bigger than it really is and has better qualities of color and clarity. That’s why this technique is very important because quality of the cut determines eventual price of individual diamond. Despite the standard called Facetware that was set by GIA, many different theories about ideal cut still exist and are often subject of many controversies.