Hoops, in embroidery, are used to hold fabric in place during the embroidery process. These hoops come in different sizes and depend on the machine and differ greatly. So it is essential to know whether you can draw the desired image in the given space. Which is why you would need hoops for any software to make embroidery. Keeping in mind that the presser foot of the machine may still reduce the effective range within that hoop. Machines will almost always allow you to measure the size of the design and it is essential that you do this.
-- In case it isn't obvious the 1st option of the smaller reddish square opens the dialog for custom hoops.