I'm not sure of the exact definition of the different ways you mentioned. I think what I'd use would be the one called a whip stitch. Fold the hem up and go under a stitch on the hem side, then on the back side of what will be the right side of the hat skim through a only part of the stitch (in other words divide the strand of yarn), it works best to do this on a purl "bump" if you have them available. Keep the stitches quite loose so the stretch is not compromised. You don't need to make the stitches real close together, I'd say between 1/4 and 1/2" apart is close enough.