# Option order imbalance

Currently studying the paper:

HU, Jianfeng. Does Option Trading Convey Stock Price Information?. (2014). Journal of Financial Economics. 111, (3), 625-645. Research Collection Lee Kong Chian School Of Business.

To test the impact of option order flow affects stock order flow. Author defines the measure of option order imbalance:

$OOI_{it}=\frac{\sum_{j=1}^{N} 100 Dir_{itj} Delta_{itj}size{itj}}{Num\_Shares\_Outstanding}$

Where, The option order imbalance,$OOI_{it}$, is measured for stock i on day t. $Dir_{itj}$ is a dummy variable equal to 1 if the jth option trade on stock i is initiated by the buyer, and -1 if the trade is initiated by the seller, according to certain trade signing algorithms.$Delta_{itj}$ is the option price sensitivity to the underlying stock price, and $size_{itj}$ denotes the trade size in option lots (100 shares of the underlying stock).

My question is: