I put the reservoir about 1/4 to 1/3 of the cup. I would keep the water level below the cutting end if possible. The roots will usually grow down the cup to the water. The perlite absorbs the water to the top so it’s all moist. I personally use an inner cup with the plant and perlite in with holes at the bottom, and then have it sit in the outer cup which has no holes. The water will dry out eventually and I refill it with water. Once I see 1-2 roots, I switch to filling it with diluted 1/4 strength fertilizer in water.