When saying the takbeer you should raise your hands, with palms facing outwards, and fingers lightly spaced out. This can be done before, after, or during the actual speaking of the words, and all of these ways are proven from the guidance of the Prophet (may the peace and blessings of Allah be upon him).
"He would raise them with the fingers [lightly] spaced out." [Abū Dāwood: 753, at-Tirmidhī: 240, with supporting narrations from Ibn Khuzaymah and al-Hākim]
There are two ways from the sunnah as to where your hands should be raised.
'Abdullāh ibn 'Umar (may Allah be pleased with him) said:
When the Messenger of Allah (may the peace and blessings of Allah be upon him) started to pray, he raised his hands until they were in level with his shoulders... [an-Nasā'ī: 1059]
Mālik ibn al-Ḥuwairith (may Allah be pleased with him) reported:
"The Prophet (may the peace and blessings of Allah be upon him) raised his hands when he bowed, and when he raised his head from bowing, until they were level with the highest part of his ears." [Muslim: 391]
It was narrated from Abdul-Jabbār ibn Wā'il that his father said:
"I prayed behind the Messenger of Allah (May the Peace and Blessings of Allah be upon him) and when he started to pray he said the Takbir and raised his hands until they were in level with his ears..." [an-Nasā'ī: 879]
Some of the scholars joined between these two ways and said that the lowest part of the hand should be level with the shoulders, and the highest part of the fingers with the ears, and in conclusion, however the hands are raised between the shoulders and the ears is acceptable.