As illustrated on the left, a optic

As illustrated on the left, a optical glass with vacuum deposition of chrome metal (opaque)at a constant pitch is called a linear scale (scale pitch of 20, 16 or 8μm is used)
The opposite scale to this linear scale is called an Index scale. This is designed to sensetwo phases of signal mutually having 90°degree phase difference for the purpose of discriminatingshift direction of the scale.

The light intensity of the light emitter is detected by the photo receptor located directly opposite.
When a linear scale moves, the photo receptor will receives variation of light and shade.
Linear displacement can be measured by counting these electric signals with a counter.
(Counting them by 20μm pitch will give 5μm display resolution and electrically dividing
the wave results in 1μm display resolution)