A term used to describe a signal output that is performed with a transistor. An open collector output acts like a switch closure with one end of the switch at ground potential and the other end of the switch accessible.

a sinking output

A type of encoder output driver that utilizes an NPN transistor. Electrically it is a current sink and requires a pull-up resistor from the supply voltage to the signal high line. This resistor can be internal or external to the encoder.