A ship's anchor relies upon the weight of the anchor chain (also called cable) to keep the forces acting on the anchor horizontal as much as possible. If the chain, at the anchor, is lifted 15 degrees it is estimated the anchor loses about half it's holding power. Insufficient scope increases the risk of dragging anchor. Excess scope on the other hand increase the risk of damaging or breaking the chain.
When the amount of scope required is determined, the distance between the end of the hawsepipe and the water is usually taken into account but for convenience the mate usually reports the amount of chain at the waters edge - for example the bow might report "6 shots in the water'. It also can be (usually when heaving in) reported by how much is on deck.
Many references recommend a scope of between 5 and 7 (of chain) to 1 (water depth)
Nicholls's Seamanship and Nautical Knowledge makes the following recommendations:
"The minimum scope of mild steel cable to use according to depths of water is given by the following rough guide:"
Below 20 m 6 to 8
20 m to 40 m 4 to 6
over 40 m less then 4
A ship may be required to anchor in as much as 100 meters of water (for example Fujairah Anchorage) with 10 shots of chain out the scope is less then 3 to 1.
Ultimately the master must determine how much scope to use based upon his experience.