Use the PhotoStitch Into Hoop 
option to create a new embroidery in the PhotoStitch Wizard that is a best-fit to the currently selected hoop.
If desired, click Change Hoop 
and choose a different hoop size before using PhotoStitch Into Hoop.
Click PhotoStitch Into Hoop 
and the Choose Embroidery Type page of the PhotoStitch Wizard will appear. Choose the desired design type, then choose a picture and step through the rest of the PhotoStitch Wizard. When you Finish, the new embroidery will be placed in the center of the hoop. Depending on its shape, it will fit in the hoop vertically and/or horizontally. Use Save 
to keep the new embroidery in multipart .vp4 format, together with any other embroideries in the work area, and use Export 
to save in other formats, and optimized for stitching.
Shortcuts
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Create Tab:
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Keys: Alt, C, P, H