Optical encoder is an important sensor used for length and angle measu rement, and two conventional optical encodes, incremental and absolute enco d ers, have outstanding advantages in optical pattern, principle of position code and signal processing circuit. With development of science and technology, a new optical encoder, virtual absolute encoder has inherited the advantages of t hese two conventional optical encoders. According to the principle of s erial p osition code, a scheme of 100 positions around a circle has been obtained with C AD. Using this position code a virtual absolute encoder has been designed.