When primary winding is excited by suitable a.c. source.It tries to produces magnetic flux. This mutual flux link with two secondary winding and as flux linkages change emf is induced in both secondaries. When core is centrally located, equal voltage is induced in both secondaries. But when core is displaced flux linkages changes and hence more voltage is induced in on secondary than the other one. The variation of o/p voltage with core position is shown fig. (a) when core is centrally located, net o/p voltage Vo is zero (theoretically). This core position is called as null position.
As core moves on either side from null positon, output voltage increases primarily dependent upon length of secondary coils. Beyond proportionality limit o/p increases at a decreasing rate until it reaches a maximum from which it drops again to the balnced condition when the core is removed. There is a phase shift as core moves both to and from from central position, so that phase measurement can be related to the direction of core motion voltage variation with core is shown fig (b).