Final Cut - Altering Opacity with Toggle Clip Overlays.

Drag a video from the Browser into the Timeline.

In the bottom left corner of the screen click the Toggle Clip Overlays button.

You will see a line appear along the top of the clip in the Timeline.

Select the Pen tool from the Toolbox.

Click anywhere on the Line which we have just created in the Timeline.

Now click some where else on the line.

Move you curser over the first point. You'll see that the pen becomes a little cross.

Click on the point and drag it down to the bottom. This makes the opacity of the video at this point zero. I.e. you can see right through it.

Try adding more points to the line with the pen tool and experimenting with opacity.