Apple Final Cut Pro 7 - Manual (Page 478)

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Press the Back Arrow key once before setting the Out point, so that you set it on the last
frame of the clip you want to select. When you do this, the last frame of that clip is included
with the Out point.
The Out point ends at
the last frame of the clip.
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Make the Canvas active, then choose View > Show Overlays. Make sure you set an Out
point when you see the overlay that indicates the end of the clip, not the start of the next
clip.
Clip Out point overlay
Sequence Out point
overlay
Setting Clip In and Out Points in the Viewer
When you set In and Out points for a clip in the Viewer, only the frames from the In point
to the Out point will be edited into your sequence. If you haven’t explicitly set an In or
Out point, Final Cut Pro uses the Media Start and the Media End points, respectively.
To set an In or Out point for a clip in the Viewer
1 Double-click the clip to open it in the Viewer.
2 Move the playhead to the location in the clip where you want to place the In or Out point.
478 Chapter 33 Setting Edit Points for Clips and Sequences