Diamond carat is often misunderstood as referring to the physical size of a diamond, but it actually measures a diamond's weight. One carat is defined as 200 milligrams.
Carat vs. Size
While a higher carat weight generally means a larger diamond, the cut of the diamond greatly affects how large it appears. A poorly cut 1.5-carat diamond might appear smaller than a well-cut 1.2-carat diamond if too much weight is hidden in the base of the stone.
Pricing and 'Magic' Sizes
Diamond prices jump at the half-carat and full-carat weights (e.g., 1.00, 1.50). Buying a diamond just shy of these "magic" sizes (like a 0.95 carat) can offer substantial savings while appearing virtually identical in size to a full carat.