That is a judgement call. If you are buying into the rally and just looking for short-term larger profits as I do, I like $.05 below bid. My stop did well today - filled at $3.44. You will lose out on a small pull back followed by a bounce playing it this conservative, but you can lock in gains. I prefer a tight stop with large dollar amounts traded on a liquid ticker like this. 10% on $100K is $10K, which makes for a great trading day. I have always done well with FNMA has it has never had a large opening gap down - that is the big risk I take as I always buy big into EOD rallies on this one; as I hope to today if this one finds legs again.
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