If you plan on using a milk jug to drain the skimate, the the green line would be much lower on the cup, but you need to keep the jug over your sump. If you are planning on emptying the skimate from the cup, I'd reccomend putting the hole higher like the picture.
Skimmers will run away, meaning you could have it adjusted perfectly and something change or you add something to the tank or something dies or you use epoxy for mounting coral. The skimmer can go crazy and start dumping a lot of water into the collection cup and then start over flowing on your floor since it's external. It's better to run diluted skimate back into the tank/sump through a overflow line than water on your floor. You know when this will happen, while your not home....