A large, lively shrimp is like a filet mignon to most gamefish. Snook, redfish and large speckled trout find a properly presented live shrimp hard to resist. The more natural the shrimp looks and acts, the more likely an elderly monster will suck it down.
The most popular method is to insert the hook directly under the "horn" on the shrimp's head, just forward of the black "spot" (which is actually center of the crustacean's nervous system). This method allows the bait full range of motion. It is also believed that gamefish eat their prey head-first.
Some anglers prefer to hook the shrimp in the tail, which also allows the shrimp to swim naturally.
The most important thing to remember is that killing your shrimp by curling it up on your hook defeats the purpose of live bait.