Check ATF with the engine running, transmission in park. The level does change when fluid is circulating, and the dipstick is calibrated to account for that.
"Hot" means 158-176 F, or 15 minutes of driving in at least warmish weather. (I'm taking this from the manual for a Vibe, which is a Toyota Matrix in Pontiac clothing.)
Basically, if you start the engine and check fluid first thing in the morning, fluid level should be in the "Cold" range. When the trans is up to temperature, fluid should be in the "Hot" range, engine running.
Remember that transmission fluid takes longer to heat up than engine coolant--the trans may not be fully up to temp just because the engine is.
As long as your cold reading is correct, you can start experimenting with hot readings after trips of different duration and types of driving. My manual says to wait 30 minutes to check if you have been driving in heavy traffic in hot weather or at high speed for quite a while. I imagine that means the reading could be above "Hot" if checked right after stopping in those cases.