The rule that my trainers always gave me was two finger widths below the tear duct bone. My horse will always have a sensitive spot from an impacted wolf tooth so I put his lower (as recommended by equine dentist), and in general I've found that other horses like it better that way. True that the nose band doesn't give quite as much control on gaping when it's lower, but in my opinion it's a bit more comfortable for the horse to have it more like four finger widths. Also let's face it, if the horse is going to gape its mouth, it's going to do it unless you move to more extreme measures such as a figure 8 caveson, which is used in dressage. Could be that my gelding is just stubborn, but he actually gapes less with a looser noseband - tight but not too tight. Of course, I've been the only person to train him for years now and he's really been the only horse I've ridden for quite a while, so Jazz and I have many odd little ways of doing things that most people and horses would think were kind of weird but that work..we're a tightknit team.