Monday, July 8, 2013
The Function Of A Diamond Exchange
By Dennis Artling
A diamond exchange is the central location in the supply chain of diamonds. Diamonds which have been mined in various locations are brought here for sorting and later they are distributed across the globe. There are several factors that are used to sort them. Dealers and manufacturers of jewelry play a major role in distribution. Before diamonds get to the end consumers they have to be cut and polished.
The largest exchange is found in Ramat Gan near Tel Aviv. The largest trading floor is located here. Other centers are found in Antwerp, Belgium and New York. Exchanges obtain diamonds from mines. The traders purchase them in their rough form.
Rough diamonds are sorted according to characteristics such as size, color, clarity as well as their value and shape. This process is carried out by people and it is therefore subjective. Sorters are usually taken through specialized training. They are also subjected to a serious background check because of their proximity to diamonds. For every 142 carats only one ounce is usable. Exchanges therefore use very sensitive scales to weigh each package of diamonds that goes through a sorter.
Another element of an exchanges operation is distribution. After careful sorting the sorters are required to sell their diamonds to dealers. Most dealers have their own polishing and cutting factories. At times some diamonds go through many dealers before they reach the end consumer.
If a sorter is to make profit he or she has to ensure that the selling price is high. A profit margin of around 10 percent is what most people make. Some exchanges get more rough diamonds than others and thus more business.
The diamond exchange in Israel handles over 15 percent of the rough diamonds that are mined in the world. The sorters here have a lot of leverage over dealers. Dealers who are referred to as sight-holders are the only people who transact with the center here.
The largest exchange is found in Ramat Gan near Tel Aviv. The largest trading floor is located here. Other centers are found in Antwerp, Belgium and New York. Exchanges obtain diamonds from mines. The traders purchase them in their rough form.
Rough diamonds are sorted according to characteristics such as size, color, clarity as well as their value and shape. This process is carried out by people and it is therefore subjective. Sorters are usually taken through specialized training. They are also subjected to a serious background check because of their proximity to diamonds. For every 142 carats only one ounce is usable. Exchanges therefore use very sensitive scales to weigh each package of diamonds that goes through a sorter.
Another element of an exchanges operation is distribution. After careful sorting the sorters are required to sell their diamonds to dealers. Most dealers have their own polishing and cutting factories. At times some diamonds go through many dealers before they reach the end consumer.
If a sorter is to make profit he or she has to ensure that the selling price is high. A profit margin of around 10 percent is what most people make. Some exchanges get more rough diamonds than others and thus more business.
The diamond exchange in Israel handles over 15 percent of the rough diamonds that are mined in the world. The sorters here have a lot of leverage over dealers. Dealers who are referred to as sight-holders are the only people who transact with the center here.
About the Author:
Investment Diamond Exchange (IDX) provides investors with the lowest polished diamond prices in the industry. To inquire about investing in diamonds, simply visit IDX and a representative will educate you.
Posted by AppleFanatic at 4:11 AM
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