The traditional way to finish a hooked rug is to attach twill tape and sew it down, and also whip the row at the edge of the hooked area with wool yarn. Didn't care for that type of finish.

My first alteration was to turn the edge, but instead of using a yarn whipped through each hole, I single crocheted around the rug. I liked this finishing technique better, and it seemed quicker to me as well.

At my new hooking circle, I met Jan Peckenpaugh and loved the look of her finished rug.  April had a great description of Jan's method on her blog, Red Jack Rugs. So I'm rewriting the steps and adding a picture of the rug at that step. This gives a really nice finish with a somewhat padded edge.

1. I skipped zigzagging because I was working on linen, but would definitely zig zag monks cloth about  an inch away from the hooked edge. I counted threads to make sure it would stay the same on each side.So mine just got turned under twice toward the front of the rug, and secured with a running stitch. step 1 fold toward front with raw or finished edge inside, running stitch

2. Attach the wool strip mine was approx 1.5 inches wide, at the outer edge of the front side.(like a quilt binding).

3. Fold up toward edge of rug, and lay flat butted against the rug. Sew through each rug loop and take a stitch in the binding where it is against hooked row.  folded edge stitched through each loon and binding

4. Fold the raw edge to the back and blanket stitch in place. Jan uses embroidery floss, but I used upholstry thread. 

blanket stitch raw edge of wool binding on back of rug