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The cut enables a diamond to make the best use of light. When a diamond is cut to good proportions, light is reflected from one facet to another and then dispersed through the top of the stone. If the cut of the diamond is too deep, some light escapes through the opposite side of the "pavilion". If the cut is too shallow, light escapes through the pavilion before it can be reflected. 

A diamond has facets that allow light to enter it, become refracted, and exit in a rainbow of colors.   As illustrated above, when a diamond is cut to ideal proportions, is carefully polished and has exact symmetry, light will then reflect from one facet to another and disperse through the top of the stone, resulting in a display of brilliance and fire.  Diamonds that are cut too deep or too shallow, lose or leak light through the side or bottom, resulting in less brilliance, fire, scintillation and value.  The cut can affect the value of a diamond by up to 35%!