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A cat's eye stone is a gemstone that has a bright band running through it, resembling a cat's eye. This optical effect is called chatoyancy. How it's made Cat's eye stones are created when light reflects off of parallel bundles of tiny hollow tubes or fibrous crystals inside the stone.The stone is cut into a cabochon shape, which has a domed top and flat bottom.The reflected light is focused into bright bands on the surface.