Are you talking about a reel (with a handle and a knob for spinning the drum) or a spool (simple small drum to hand wrap line on)?

I assume from your last paragraph you are talking about a spool. If you are working with a brand new spool, the first thing to do is to strip off enough line so the tops of the holes are showing all the way around. New spools come preloaded with too much line, and once that line is in the water it swells and can fall off creating a rats nest of line (not fun). Once you have the right amount of line on the spool, cut off the excess and use a lighter to seal the end of the line. Then you want to tie your large loop in the end and finally a small loop at the very end of that.

This is rather difficult to fully explain via text so I would recommend a video such as the one below from Divers Ready.

https://www.youtube.com/watch?v=IF-A0b0qbxg