If plans come together, diamonds may become a trader's best friend.

Investors have been using futures and derivatives contracts in metals, agricultural products, currencies and other risk-related investments to hedge against losses for decades.

Now, a group is trying to add diamond contracts to the list of exchange-traded instruments.

The Rapaport Group, a diamond price and information provider, will hold the first of planned monthly online diamond auctions this week. Transaction prices will be used to create an index in hopes of developing a diamond futures market.

"We're creating a new level of transparency for diamond prices," chairman of the Rapaport Group, Martin Rapaport said.

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