First let's consider the first two lines of actionscript:
Set Variable: "red_x" = GetProperty ("/red",_x)
Set Variable: "red_y" = GetProperty ("/red",_y)
The code contains two key elements, the action and the property. The actions set value of the variables 'red_x' and 'red_y' to be the x and y properties of the movie clip red
Definition
: Variable - A variable is a mathematical quantity or a symbol that represents it.
For those of you who may need a refresher on what _x and _y are, here is a simple x and y axis picture. You most likely remember this from school.