This is kind of a matter of personal preference, because it really depends on how high your hammock is. While we have seen pictures of people who hang their hammocks way up in the tree, we are simply not bold enough for that. The truth is, a hammock works just as well one foot off the ground than it does at ten feet off the ground. As long as your butt isn’t scraping the dirt, you are good to go.
The hammock fly should be two to 3 feet above the hammock itself, which will give the user enough headspace to read a book, operate a lantern, or simply hand out and chill. Of course, there is no hard and fast rule here. If you want, you can set the hammock fly higher in the air and create a standing space for those rainy day camping parties.