This is an quadrature incremental rotary encoder YT06-OP with 600 PPR (pulse per revolution). The encoder outputs gray code which you can interpret using a microcontroller or Arduino and find out which direction the shaft is turning and by how much. 

This allows you to add feedback to motor control systems. Encoders of this kind are often used in CNC machines, balancing robots and dead reckoning navigation.

This encoder is of improved reliability with reverse connection and load short-circuit protection 

Features

• YT-OP-600/R      PNP TYPE
• Resolution: 600 Pulse/Rotation
• Encoding Method: Incremental
• Input Voltage: 5 - 24VDC
• Maximum Rotating Speed: 6000rpm
• Cable Length: 50cm
• Shaft Diameter: 6mm
• To use with Arduino, need adaptor 9 VDC  1A.

Encoder manual and Arduino example code