An analysis of the fringe visibility of a speckle interferometer has been given as a function of the source position. The interferometer consists of a double exposure speckle recording which, for an infinite aperture, produces in monochromatic light a set of unit visibility rectilinear fringes localized at infinity. In practice, the plane conjugate to that of the point source of light is taken to be the localization as well as the observation plane of the fringes. A longitudinal displacement of the light source gives rise to a reduction in the fringe visibility which has been monitored by positioning a line detector in the observation plane. The sensitivity of such a position sensing device depends upon the size and location in reference to the fringe profile and it has been estimated to be of the order of 0.1 micrometer. This study has been applied to the design and construction of a remote electro-optic displacement sensor. The range and the sensitivity of the device are mutually complementary and one could only be increased at the loss of the other or vice-versa. Furthermore, a study of the linearity of the sensor has been made as a function of the other sensor parameters.