Carat is the unit of measurement of the weight of a diamond. In terms of grams, a carat is equivalent to only 0.2 grams.
The term "carat" originates from The Middle East where around 500BC they used seeds from a carob tree to measure the weight of diamonds, as it was thought that carob seeds all had identical weights. Interestingly enough, in recent times, this theory has been dis-proven .
In 1913, the carat measurement was introduced in the United States and is now the standard across the world.
Carats and Points
A carat consists of 100 points. Therefore, a 0.50 carat diamond is equivalent to 50 points. It is also not uncommon to hear diamond merchants refer to smaller diamonds in terms of points. For example, a diamond weighing 10 points may be called a "10 pointer".
Measuring Carat Weight
Measuring carat weight is a simple and objective procedure using a specialised gem scale. An example of such a scale can be seen at Dendritics.
Relationship to Diameter
It is important to note that a diamond weighing two carats will not have twice the size of a diamond weighing one carat.
Diamondring.com shows that whilst a 0.5 carat diamond should have an approximate diameter of 5.2mm, a 1 carat diamond will have an approximate diameter of 6.5mm.
Relationship to Cut and Spread
Sun Jewelry states:
This is due to the fact that a cutter may sacrifice a good cut in order to achieve a higher carat weight. This can be done through cutting a thicker girdle or by making the overall depth bigger.
Sun Jewelry then goes on to state that:
Relationship to Price
As larger diamonds are more rare, there will not be a linear increase in price between carat weights. This means that a two carat diamond will cost more than double a one carat diamond.
In addition, as weights reach certain "milestones", a premium is generally added. For example, one may pay a premium for a one carat diamond over a 0.99ct carat diamond. Fred Cuellar states that to overcome this problem, one may "buy shy" to save money.
Choosing The Best Carat Weight
Blue Nile has a guide to choosing the best carat weight, along with an interactive pictorial of various carat weights.