A cabochon is a stone that is cut with a highly polished rounded or convex top with no faceting, with a flat or slightly domed base. A cabochon may be cut in any shape, though oval is by far the most common. Certain stones are almost always cut as cabochons, including opal, turquoise, onyx, moonstone, and star sapphire.
Technically, cabochons are not really "cut." Rather they are shaped and then polished. It is thus a much simpler task to produce a cabochon than it is to cut a faceted gem with many faces. Before the art of faceting was developed, all gemstones were produced as cabochons, though some were intricately carved as well.
Once the technology and skill was available to facet gemstones, why were cabochons still produced? The question is an interesting one because different gems are cut as cabs for different reasons. In many cases it is because the gem has special properties that are displayed only when it is cut as a cabochon. Examples are gems that display asterism (the star effect) or chatoyancy (the cat's eye effect) or iridescence (e.g., opal) or adularescence (e.g., moonstone).
Most gems that are opaque rather than transparent are cut as cabochons rather than faceted. You will also see lower grade material in gemstones such as sapphire, ruby and garnet cut as cabs. If the gem material has very good color but is not sufficiently transparent or clean to be faceted, it can still be shaped and polished to be a very attractive cabochon. It is also common to cut softer stones as cabs. They can easily be scratched and the minute scratches show much less on a cabochon than on a faceted stone.
(Original Article by Gemselect.com)