Colored diamonds have color because of structural defects that cause the stone to absorb all but one color of the rainbow or in the case of black diamonds all the colors are absorbed. Because colored diamonds are rare and pretty they actually cost more than the clear diamonds, sometimes in excess of thousands of dollars for the same carat size.
Diamond colors are, colorless, white, yellow, steel, blue, orange, green, pink, brown, and black. Any diamond with a color is referred to as a colored diamond, but if the color is very chromatic it will be classified as a fancy colored diamond. The most common of the colored diamonds is yellow.
The commercial classification of colored diamonds uses an alphabet system. The range of colorless to white can be identified as a letter ranging from ‘D’ through ‘I’. A near colorless diamond may be identified as ‘J’ through ‘L’. A faint yellow diamond will be an ‘M.’ A light yellow diamond can be classified as one of the letters ‘N’ through ‘R’ and the yellow diamonds in a range from ‘S’ to ‘Z’. The other colors will all be classified as colored diamonds, for example a blue diamond is call a ‘colored blue diamond’ or if it’s very blue, ‘fancy colored blue diamond.’
On a side note a diamond can be colored on purpose with irradiation followed by heat treatment. There is a risk involved with being exposed to irradiated objects so it’s not a recommended process. Also the color may change over time. It is required that color treated diamonds are sold as colored treated and sellers can’t mislead the buyer.