How should you hold the basketball? How you hold the ball depends on how you want to release it. It is generally recommend that you hold the basketball so that you can pass, shoot, or dribble using wrist action.
Consequently, at all times, you should hold the ball with the wrists cocked and relaxed; and have fingertip control.
Where should you hold it? First, do not present it, that is, hold it so that the player guarding you can take it away or tie you up for a jump ball. When holding the ball below eye level, keep it close to your body. When holding it above eye level, always keep your wrists directly above your elbows.
Whether you hold it above or below eye level depends on which option you choose to initiate. In front-court play, your three options are to pass, shoot, or drive. In mid-court and full court play, you can pass or drive. You can only initiate one of these at any particular moment.
In full-court play, the first sequenced play option should always be an overhead or baseball pass directly to your hoop or to a player occupying a position in the mid-court area. Only after checking-off these options, should you advance it with a with a shorter pass in the back court or with a dribble.
In the front-court, as you are receiving a pass, you should know what should be happening next. For example, if you are playing a wing or forward position, the first option may be to pass the ball to a teammate in the post position. Consequently, as soon as you receive the pass, you should initiate an overhead pass to the post. As you initiate, if the passing lane is there, execute the pass. If it is not there, execute another option assigned to your position. For example, drive the middle. The time between initiating the pass and executing an option should be as short as possible.
To summarize, hold the ball so that you can execute a pass, shot, or dribble using wrist action. Where you hold the ball depends on what play option you choose to initiate immediately after getting possession of the ball.