So given the function $f=x^2-1=0$, we must use secant method to find a root, I also have $x_1=-1+\epsilon, x_2=\frac{\epsilon}{2}$. I am to prove $x_3=-1-\epsilon$
$f(x_1)=-2\epsilon+\epsilon^2, f(x_2)=\frac{\epsilon^2}{4}-1$ By the secant method $x_3=x_2-f(x_2)\frac{x_2-x_1}{f(x_2)-f(x_1)}$
So $x_3=\epsilon/2-(\frac{\epsilon^2}{4}-1)\bigg(\frac{\frac{\epsilon}{2}-(-1-\epsilon)}{(\frac{\epsilon^2}{4}-1)-(-2\epsilon+\epsilon^2)}\bigg)$
But this now seems unsimplifiable to me and out of the ball park of the expected solution
As G.Gare mentioned, you have a few mistakes.
Correcting them and simplifying, you should get $$x_3=\frac{(\epsilon -1) \epsilon +2}{3 \epsilon -2}$$ Since $\epsilon$ is supposed to be small, use the long division or Taylor series to get $$x_3=-1-\epsilon -2 \epsilon ^2+O\left(\epsilon ^3\right)=-1-\epsilon +O\left(\epsilon ^2\right)$$