Modern Bite Alarms usually work through use of a reed switch which conducts when an magnetic field passes over it.
A magnet is contained within a wheel that turns when line is passed over it. Therefore when the magnet and reed switch come together the bite alarm sounds.
This is why a bobbin needs to be used when using a bite alarm, so that the line will turn the wheel and therefore the bite alarm will sound.
This may be an over simplified version, but in essence it is the basics of bite alarm operation.
