Inside of wrist

See the last paragraph ion the 'A better fit means better readings' section of:

Wearing your Apple Watch - Apple Support

"...the sensors will work only if you wear your Apple Watch on the top of your wrist."

Hello Tonyandseansmommy,

Welcome to Apple Support Communities. It looks like you're having questions about measuring Blood Oxygen app using your Apple Watch, and we'd like to help.

"How to take a blood oxygen measurement

You can take a blood oxygen measurement at any time with the Blood Oxygen app.

1. Make sure that your Apple Watch is snug but comfortable on your wrist.
2. Open the Blood Oxygen app on your Apple Watch.
3. Stay still, and make sure your wrist is flat with the Apple Watch facing up.
4. Tap Start, then keep your arm steady for 15 seconds.
5. Wait. The measurement takes 15 seconds. At the end of the measurement, you will receive the results. 
6. Tap Done."

How to use the Blood Oxygen app on Apple Watch Series 6 or Series 7

Also, check out this helpful link:

Measure blood oxygen levels on Apple Watch (Apple Watch Series 6 and Apple Watch Series 7 only)

We hope this information is useful. Kind regards.