LD uses linearly polarized light, which is light that has been polarized in one direction only.  This produces a wave, the electric field vector, which oscillates in only one plane, giving rise to a classic sinusoidal wave shape as the light travels through space.  By using light parallel and perpendicular to the orientation direction it is possible to measure how much more energy is absorbed in one dimension of the molecule relative to the other, providing information to the experimentalist.
As light interacts with the molecule being investigated, should the molecule start absorbing the light then electron density inside the molecule will be shifted as the electron becomes photoexcited.  This movement of charge is known as an electronic transition, the direction of which is called the electric transition polarisation.  It is this property for which LD is a measurement.
The LD of an oriented molecule can be calculated using the following equation:-
:LD = A- A
Where A is the absorbance parallel to the orientation axis and A is the absorbance perpendicular to the orientation axis.
Note that light of any wavelength can be used to generate an LD signal.
The LD signal generated therefore has two limits upon the signal that can be generated.  For a chemical system whose electric transition is parallel to the orientation axis, the following equation can be written:
:LD = A- A = A > 0
For most chemical systems this represents an electric transition polarised across the length of the molecule (i.e. parallel to the orientation axis).
Alternatively, the electric transition polarisation can be found to be perfectly perpendicular to the orientation of the molecule, giving rise to the following equation:
:LD = A- A = - A < 0
This equation represents the LD signal recorded if the electric transition is polarised across the width of the molecule (i.e. perpendicular to the orientation axis), which in the case of LD is the smaller of the two investigable axes.
LD can therefore be used in two ways.  If the orientation of the molecules in flow is known, then the experimentalist can look at the direction of polarisation in the molecule (which gives an insight into the chemical structure of a molecule), or if the polarisation direction is unknown it can be used as a means of working out how oriented in flow a molecule is.