Apple Final Cut Pro X (10.0.9) - Manual (Page 353)

Chapter 12 Keying and compositing 353
This is what the final composite looks like over a background clip.
Use a clip with an alpha channel
1 Position the playhead in the Timeline where you want to add the alpha channel clip.
2 Select the clip that has an alpha channel in the Event Browser, and choose Edit > Connect to
Primary Storyline (or press Q).
3 To see the composited clips, position the playhead within the clip that was just added above the
primary storyline.
Connected clip
(composite foreground)
Primary storyline clip
(composite background)
The clip is composited over the primary storyline video clip, with the alpha channel controlling
the opacity of its clip.
You can also use the Opacity adjustment’s fade handles to dissolve the foreground clip on
and off.