Cut is often confused with shape. Shape refers to the overall outline of a diamond when viewed from the top. Examples include princess, emerald, marquise, oval, pear, heart and cushion. These are referred to as fancy shapes.

The overwhelming majority of diamonds, however, are round, and the most common cut is the round brilliant. A diamond's cut and grade refers to the placement and proportions of facets in a round brilliant diamond, measuring to the extent to which they maximize brilliance (light return), scintillation (sparkle), and fire (flashes of colour).

There is no single set of angles and proportions that constitute an ideal round-brilliant cut, but there are general parameters that dictate the quality of a diamonds cut. Width and depth affects how light travels through a diamond and when it exits diamond. The goal is to angle the facets in a way that causes them to reflect light out through the top, or the table, of a diamond. When a diamond is too shallow, light will exit through the bottom, or pavilion. When a diamond is too deep, light will exit to the sides of the pavilion.