|Opal is an amorphous form of hydrated silica. Most opal has some degree of turbidity in the background structure making them translucent at best, and may or may not show the "play of color" often associate with it. Although some varieties are referred to as "crystal opal" this is not related to their structure but rather their unusual clarity.
The opal called "fire-opal" does not refer to the color play that we might think. Fire opal originates from Mexico and gets its name from it bright red color, the color of the entire stone, not any internal fire or "play of color". (See the Mexican Fire opal below)
The highly sought after "play of color" in opal is caused by the formation of evenly spaced silica spheres during the precipitation of the opal. The evenly sized spheres lay down in ordered layers creating diffraction grids. The diffraction grid breaks up light entering the stone and return an array of color flashes. The quality of the opal is affected by the size, quantity and placement of the spheres. The spheres need to be about 1/2 the wavelength of light, the larger the area occupied, the larger the color flash produced.
The type and quantity of color flash aids in determining the value of the stone. Many small flashes or dots of color is called "pin fire", larger areas of flash is named "broad flash", and when all of the large color area touch one another the opal may be called a harlequin opal.
The background material also help in determining value. The most common is a white, cloudy background and thus is the least expensive. Also white does nothing to enhance the color play. Sometimes the opal background is actually transparent and this is called "crystal opal". This makes beautiful stones but does not show off the color play to its best advantage, and hence it is not the most desirable background. Opals can be gray to black in color and this type of opal is often referred to as "black opal" and is the most highly prized. The darker the background the better it displays the fire. It is commonly thought that the best black opal ever unearthed came from Lightening Ridge, Australia.
Since opal is created during a slow precipitation process in openings within a host rock, it often forms seams or various sizes. It can be found in fossils and other hollow places. Sometimes it is found in petrified wood and often without color play. There is an example of dendritic opal (with no color) in the cabochon pictures below.