Global Investment Grade for Natural and Synthetic Gems used in Financial Investments and Commercial Trading and Method of Creating Standardized Baskets of Gems to be Used in Financial and Commercial Products

Abstract

A process to create a fungible global standard for diamonds and gemstones involves grouping diamonds in an investment standard according to their gemological, proportional, optical and light behavior characteristics. Diamonds that conform to the investment grade standard are interchangeable within a specific size range according to an equivalent monetary bundling process. Diamonds subjected to the standard conform to a holistic set of gemological, proportional, optical and light characteristic requirements that enables diamonds to be classified into a extraordinarily homogeneous, visually indistinguishable and highly fungible group which can be used to create baskets of diamonds to form an index/benchmark for diamond pricing, financial instruments, and a standard that can be used for certifying diamonds as investment grade to insure quality.

What is claimed is: 
     
         1 . A method of commoditizing and trading financial instruments relating to one or more gems comprising:
 providing an exchange adapted for trading a financial instrument representing an interest in a plurality of gems, wherein the financial instrument is initially valued by receiving data regarding the plurality of gems, wherein the data includes an equivalent monetary value of the plurality of gems, the equivalent monetary value determined by a computer in response to input of gemological characteristics and optical characteristics of each gem of the plurality of gems;   calculating the intraday pricing of the financial instrument wherein the intraday pricing is calculated using the following algorithm:
   NAV= Xo ( Yo )  X 1( Y 1)+FI−FE; and
 
   settling or redeeming trades of shares of the financial instrument conducted on the exchange.   
     
     
         2 . The method of  claim 1  wherein the financial instrument is an equity share of the plurality of gems. 
     
     
         3 . The method of  claim 1  wherein the financial instrument is a futures contract. 
     
     
         4 . The method of  claim 1  wherein the financial instrument is an options contract. 
     
     
         5 . The method of  claim 1  wherein the financial instrument is a share of an exchange-traded fund comprising one or more plurality of gems and a cash component. 
     
     
         6 . The method of  claim 1  wherein the gemological characteristics include predetermined characteristics selected from the following: color, clarity, shape, cut grade, general properties, finish polish, symmetry, fluorescence, surface characteristics and culet. 
     
     
         7 . The method of  claim 6  wherein the optical characteristics are within a range of predetermined criteria including each of said plurality of diamonds having a score of high or better on white light, color light, and scintillation using a Gemex Light Performance analysis or similar light performance analysis, having optical symmetry as denoted by a hearts and arrow pattern when viewed through a hearts and arrow viewer, and having less than 20% blatant light leakage under Light Path Scope or Firescope inspection or other reflector technology inspection. 
     
     
         8 . The method of  claim 1  wherein the plurality of gems are selected from a predetermined range of weight classifications. 
     
     
         9 . The method of  claim 8  wherein the predetermined range of weight classifications is between about 0.5 to about 2.3 carats. 
     
     
         10 . A system for trading a financial instrument comprising:
 an exchange adapted to trading the financial instrument and settling or redeeming trades of the financial instrument traded on the exchange,   the financial instrument comprising an interest in a plurality of gems having gemological characteristics within a range of predetermined criteria and optical characteristics within a range of predetermined criteria, said plurality of gems further being selected from predetermined range of weight classifications, wherein the collection of said plurality of gems has a monetary value associated therewith and is held in trust in exchange for the financial instrument, wherein the equivalent monetary value is determined by a computer in response to input of the gemological characteristics and optical characteristics;   a computer associated with the exchange for tracking trading of the financial instrument to acquire purchase and sale data relating to the trading of the financial instruments and calculating the intraday pricing of said financial instrument wherein the intraday pricing
   =NAV= Xo ( Yo ) X 1( Y 1)+FI−FE.
 
   
     
     
         11 . The system of  claim 10  wherein the financial instrument is an equity share of the plurality of gems. 
     
     
         12 . The system of  claim 10  wherein the financial instrument is a futures contract. 
     
     
         13 . The system of  claim 10  wherein the financial instrument is an options contract. 
     
     
         14 . The system of  claim 10  wherein the financial instrument is a share of an exchange-traded fund comprising one or more plurality of gems and a cash component. 
     
     
         15 . The system of  claim 10  wherein the gemological characteristics include predetermined characteristics selected from the following: color, clarity, shape, cut grade, general properties, finish polish, symmetry, fluorescence, surface characteristics and culet. 
     
     
         16 . The system of  claim 15  wherein the optical characteristics are within a range of predetermined criteria including each of said plurality of diamonds having a score of high or better on white light, color light, and scintillation using a Gemex Light Performance analysis or similar light performance analysis, having optical symmetry as denoted by a hearts and arrow pattern when viewed through a hearts and arrow viewer, and having less than 20% blatant light leakage under Light Path Scope or Firescope inspection or other reflector technology inspection. 
     
     
         17 . The system of  claim 10  wherein the plurality of gems are selected from a predetermined range of weight classifications. 
     
     
         18 . The system of  claim 17  wherein the predetermined range of weight classifications is between about 0.5 to about 2.3 carats. 
     
     
         19 . The system of  claim 10  wherein the gems are diamonds. 
     
     
         20 . The method of  claim 1  wherein the gems are diamonds. 
     
     
         21 . A method for conducting exchange-based trading comprising:
 providing an exchange adapted to trading;   listing a financial instrument to be traded, the financial instrument comprising an interest in a plurality of gems having gemological characteristics within a range of predetermined criteria and optical characteristics within a range of predetermined criteria; said plurality of gems further being selected from predetermined range of weight classifications, wherein the collection of said plurality of gems has a monetary value associated therewith and is held in trust in exchange for the financial instrument, wherein the equivalent monetary value is determined by a computer in response to input of the gemological characteristics and optical characteristics; and   settling or redeeming trades of the financial instrument conducted on the exchange.   
     
     
         22 . The method of  claim 21  wherein the financial instrument is an equity share of the plurality of gems. 
     
     
         23 . The method of  claim 21  wherein the financial instrument is a futures contract. 
     
     
         24 . The method of  claim 21  wherein the financial instrument is an options contract. 
     
     
         25 . The method of  claim 21  wherein the financial instrument is a share of an exchange-traded fund comprising one or more plurality of gems and a cash component. 
     
     
         26 . The method of  claim 21  wherein the gemological characteristics include predetermined characteristics selected from the following: color, clarity, shape, cut grade, general properties, finish polish, symmetry, fluorescence, surface characteristics and culet. 
     
     
         27 . The method of  claim 26  wherein the optical characteristics are within a range of predetermined criteria including each of said plurality of diamonds having a score of high or better on white light, color light, and scintillation using a Gemex Light Performance analysis or similar light performance analysis, having optical symmetry as denoted by a hearts and arrow pattern when viewed through a hearts and arrow viewer, and having less than 20% blatant light leakage under Light Path Scope or Firescope inspection or other reflector technology inspection. 
     
     
         28 . The method of  claim 21  wherein the plurality of gems are selected from a predetermined range of weight classifications. 
     
     
         29 . The method of  claim 28  wherein the predetermined range of weight classifications is between about 0.5 to about 2.3 carats. 
     
     
         30 . The method of  claim 21  wherein the gems are diamonds.