The better the diamonds clarity, the more rare and valuable it is. All diamonds have inclusions, even internally flawless diamonds. You just need more magnification to see them. Diamonds are graded with a 10x magnification loupe. There are several grades of clarity, but they all fit into one of two categories: ones with eye visible inclusions and ones with no eye visible inclusions. Diamonds that show eye visible inclusions are I Clarity, either I1, I2 or I3. I1 diamonds have one or two very tiny eye visible inclusions. I2 have more and I3 are heavily included. Those that are completely eye clean are most desirable. SI2 and better diamonds are completely eye clean. SI2 and better diamonds require a 10x loupe to see the difference. An SI2 will look exactly like an IF to the naked eye. Flawless "FL" and internally flawless "IF" are the rarest and most expensive diamonds. The next grade is VVS1 and VVS2. This stands for "very very small" inclusions, then very small inclusions, VS1 and VS2 and finally small inclusions SI1, SI2 and SI3.

Notice the small inclusions near the sides of the I1 Clarity diamond. The facets will, for the most part, hide those inclusions from being seen. An SI3 diamond will look just like the I1 except without the eye visible inclusion in the table. I2 and I3 diamonds have more inclusions and they tend to be bigger and more noticeable as well.

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