With a paladins divine smite you choose to use it when it hits, is it the same with Arcane Shot or no?

"You decide to use the option when the arrow hits a creature, unless the option doesn’t involve an attack roll." In other words, yes.

"Once per turn when you fire an arrow from a shortbow or longbow as part of the Attack action, you can apply one of your Arcane Shot options to that arrow. You decide to use the option when the arrow hits a creature, unless the option doesn’t involve an attack roll." 

Piercing Arrow and Seeking arrow are the exceptions as they don't involve an attack roll. All of the other arrow options allow you to decide to use it after you hit.

I understand what it says, what's confusing me are the interpretation of the two sentences.  The first sentence is saying you chose whether you use arcane shot or not. The second sentence is you chose which option you use when you hit a creature. So if you miss then you dont need an option since it was a miss, that's what's confusing 

The first sentence is there to say 1) Once per turn, when you fire a shot from a shortbow or longbow (i.e. crossbows aren't an option), and 2) this must be part of the Attack action, not some other form of attack. It tells you which types of attack qualify for an Arcane Shot, and says " you can apply" an arcane shot option.

The second sentence tells you when you decide whether or not to burn one of your 2 Arcane Shots. Unless the option doesn't require an attack roll (and therefore doesn't have any chance of whiffing), you decide when you hit - which means you can never "miss" on your Arcane Shot. They still may succeed on their save, but you're always either doing extra damage or forcing a save, regardless.

What you said was contradictory though cause you can still miss with your attack,  you declare you are using an Arcane Shot and if you do miss on your attack then it's wasted

I'm afraid you completely misunderstood. Allow me to explain when you declare you're using an Arcane Shot, so you understand it cannot be wasted by definition.

You declare you're using it in two cases:

1) The option you're using does not require an attack roll. Piercing Arrow and Seeking Arrow fall into this category. To use these abilities, you declare that you're using one of them and spend the attack (that qualifies based on sentence one) and the ammunition, and the effect simply happens.

2) You hit a creature with an attack that qualifies based on sentence one, and then you declare that you're using an option that requires a hit. All the other Arcane Shot options fall into this category.

Why do you need to say you are using arcane shot when you could just say you are using one of the options when you hit. My DM rules it as before you fire an arrow you declare you are using Arcane Shot,  if you miss you have one use left 

I'm sorry, that really sucks! Show him or her this thread and the millions of others that exist all over the internet addressing this very question. 

In short, Arcane Shot triggers on a hit, unless there's no attack roll involved.

Just look at it like a Paladins Smite mechanic. You declare the use after a shot hits, except for the two options noted above. You only get two uses per short rest already. My DM even lets me roll double the dice if I declare it on a crit. 

I have a question regarding Arcane Shot and I couldn't find a better forum so I am hoping someone here can help me with it. 

I would like to use Bursting Arrow like a grenade without fear of hitting my party members. If I declare that I am aiming at a spot behind enemies so that the arrow detonates behind them, they take the damage but my front-line party members do not, is this allowed? Or am I restricted to hitting a creature as the description says? Or would this be one of those house rules type things where my DM decides if this is allowed?

Thank you.

Quote from Janeser >>

I have a question regarding Arcane Shot and I couldn't find a better forum so I am hoping someone here can help me with it. 

I would like to use Bursting Arrow like a grenade without fear of hitting my party members. If I declare that I am aiming at a spot behind enemies so that the arrow detonates behind them, they take the damage but my front-line party members do not, is this allowed? Or am I restricted to hitting a creature as the description says? Or would this be one of those house rules type things where my DM decides if this is allowed?

Thank you.

By RAW I assume it would only be when hitting a creature.

But it would make sense to have it act as a grenade, so I would houserule it that whatever you hit, it would still release that energy. It is called a bursting arrow after all. xD
Make sure to talk about it with your DM. Seems like an easy call. 

@Janeser: RAW, you choose to trigger your Arcane Shots only after you hit an enemy with an arrow. Turning Bursting Shot into an AOE effect with no direct target would be a DM house ruling. A totally reasonable one I would hope you get to use, but definitely a house rule. 

Thanks very much for the response. 

I'll be having that conversation with my DM. :-)

Quote from Gomani >>

Just look at it like a Paladins Smite mechanic. You declare the use after a shot hits, except for the two options noted above. You only get two uses per short rest already. My DM even lets me roll double the dice if I declare it on a crit. 

 
You should absolutely be able to double the dice on a crit.  All the dice you roll as part of the damage roll are doubled.