Select a Method for appliqué placement, and set the appliqué piece Margin.
Method
Choose the method for placing and securing the appliqué fabric.
Use a pre-cut appliqué piece; created, for example, using an automatic cutter or cutwork needles.
Stitch a running line to show where the pre-cut appliqué piece should be placed, then stop to position the appliqué piece. Stitch down the appliqué piece with double stitch, then finish the edges with the selected border stitching.
Stitch a running line to show where appliqué fabric should be placed, then stop to position the fabric. Stitch down the appliqué fabric with double stitch, then stop so the fabric may be trimmed. Finish the edges with the selected border stitching.
Margin
Select the margin for appliqué placement relative to the drawn border shape.
The available options are: None, 0.5mm, 1.0mm, 1.5mm, 2.0mm, 2.5mm, 3.0mm, 4.0mm and 5.0mm. The initial value is 1.0mm.
Match Placement Line
Adjust the position of the first running stitch line for either Tack and Trim or Pre-cut Piece so that it matches the outline of the appliqué piece after the appliqué piece Margin has been applied.
Note: This may be useful for precise positioning of appliqué pieces that have been pre-cut with an automated cutter, to ensure the placement line is visible.
Setting Appliqué Options
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Create a design.
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Save the design. See Save As.
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In the Export Tab
of the Design Panel 
click Embroidery Appliqué 
.
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Choose an Appliqué Method from the pop-up menu.
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Use Margin to set the margin for appliqué placement relative to the border.
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Use Match Placement Line to set the position of the first running stitch line so that it matches the outline of the appliqué piece.
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Click Export
. The Export dialog appears. -
Select a format from the pop-up menu.
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Browse to the folder for your designs.
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Click Save.
Note: For Embroidery Appliqué you need to set Embroidery Options as well as Appliqué Options. See Embroidery Options.
Use Pre-Cut Piece to use a pre-cut piece of appliqué fabric in your embroidery.
Use Tack & Trim to stitch down the appliqué fabric, then stop to trim the fabric.
The appliqué embroidery is saved in your chosen folder.