CTW stands for Carats Total Weight. A carat is .007054 oz. It seems like a tiny amount, but a 1-carat diamond of fine quality might be valued at $25,000 or more as of August 2009.
Carats vs. Karats
Carats refer to the weight of gemstones. Karat refers to the gold content of gold alloys.
CTW refers to the weight of all the individual stones in a setting. A setting comprised of many tiny diamonds might have a 1 CTW, but this does not mean there is a 1-carat solitaire diamond in the ring.
If a ring has other gemstones in addition to diamonds, the CTW could be 5 carats, but it makes an enormous difference in value if 4.75 of those carats are amethysts (of little value) instead of diamonds. A necklace of low-quality opaque rubies of 500 CTW might appraise for as little as $30.
Significance of Carat Weight
Gemstone solitaires are significantly more valuable in larger sizes. As stone sizes increase, the price per carat jumps exponentially, reflecting the rarity of such stones.
A pave setting contains many tiny diamonds that create an intricate design. CTW is a significant measure when purchasing pave set rings.
A diamond semi-mount is the perfect setting for an engagement ring. A semi-mount might have a CTW of 1 carat or more of diamonds; add a solitaire diamond weighing 1 carat and you can brag about your ring's 2-carat total weight.