Simply Put:

Carat weight is the size of a diamond

How much is one Carat and how is it related to diamonds?
One carat is equal to 0.2 grams, about the same weight as a paperclip. Diamonds and other gemstones are weighed in metric carats. Don’t confuse carat with karat, as in “18K gold,” which refers to gold purity.

How does the Carat system work?
Just as a dollar is divided into 100 pennies, a carat is divided into 100 points. For example, a 50-point diamond weighs 0.50 carats. But two diamonds of equal weight can have very different values depending on the other members of the Four C’s: clarity, color and cut.

How important are Carat measurements?
Because even a fraction of a carat can make a considerable difference in cost, precision is crucial. In the diamond industry, weight is often measured to the hundred thousandths of a carat, and rounded to a hundredth of a carat. Diamond weights greater than one carat are expressed in carats and decimals. (For instance, a 108 point stone would be expressed as 1.08 cts.)

How did the Carat system start?
The carat, the standard unit of weight for diamonds and other gemstones, takes its name from the carob seed. Because these small seeds had a fairly uniform weight, early gem traders used them as counterweights in their balance scales. The modern metric carat, equal to 0.2 grams, was adopted by the United States in 1913 and other countries soon after. Today, a carat weighs exactly the same in every corner of the world.

Truth About Diamonds – Carat:

Why are larger stones priced exponentially more?
A 2Ct diamond is usually not twice the price as a 1Ct diamond, but rather it is much more. This is because a 2ct diamond is much more rare than a 1Ct, making it much more valuable.

Is there any way to save money, while still having the appearance of a larger stone?
Yes! If you want a larger stone, (for example a 2Ct stone), but it is not in budget, you can buy four 50pt stones each and it will give the illusion of 2Ct stone.

What is the Best Bang for my Buck?
No matter what the Carat weight of the stone may be, the best value can be attained through a diamond in the ranges of G-I Color Range, and VS2-SI2 Clarity Range.

Why are Round Diamonds priced higher than other shapes?
Round Diamonds are priced higher, given all other factors are the same, due to the fact of when cutting a Round Diamond, you lose the most Rough Carat Weight of any shape.

Keep in Mind:
One important piece of information to think about is that a 2Ct diamond will look larger on someone with a Size 4 finger, then a Size 7. Keep this in mind when deciding what factors are most important to you.

Great Tip:
Try to find a 1.70-1.80Ct stone where the depth percentage makes the stone look like a 2Ct, because you are only paying price of 1.70Ct. It is thus possible to have a diamond of a lower carat weight to appear larger than a diamond with a larger carat weight, due to the way the diamond is cut. You want a shallow stone that is still cut nice that will sparkle.

Carat is the unit in which diamond is weighed. One carat equals to 0.2 grams or 200 milligrams. Carat weight is the prime factor that determines the weight of a diamond. Bigger diamonds are undoubtedly costlier. Carat makes expressing diamond weight easier as compared to milligrams. Instead of giving three labels to diamonds weighing 20 milligrams, 211 milligrams and 220 milligrams, carat offers a category for fitting the diamonds in a one category, placing these diamonds in one-carat range.

One should not forget that high carat weight does not necessarily mean bigger looking diamond. Even diamonds of the same weight can differ on basis of other factors, especially cut that influences perceived size. If you are looking for diamonds with great cut and brilliance, look for lesser carat weight for bringing the rate down. A little difference in carat can also change the rate of the diamond.

Large diamonds are rare to find and much in demand as compared to small diamonds even of the same quality. The price of a one-carat solitaire diamond ring is more than the ring that has many small diamonds with total of one-carat weight fitted in it. Diamond comparison is not effective until you compare the diamonds of similar features and qualities. While comparing the value of different diamonds, divide cost of every diamond in accordance with the carat weight and then calculate its price per carat.

One carat is equivalent to 100 points so every point is 1/100th of carat. Carat weight also influences a diamond’s price. Because of rarity of larger stones, they are priced higher. Carat weight is an important consideration while buying the diamonds for your self.