I had the same problem when I first tried Magic Loop. In my case, it was the right hand loop that was causing the problem. I couldn’t find a way to keep the sides of the loop – the front and back portions of the cable – close enough together to work my stitches comfortably. And this was also stretching my stitches at that same point in my work.
My solution: After I pull the back needle around to the front, ready to start the next round, I give the resulting loop a twist. This keeps the cables of the loop from spreading apart so my work isn’t stretched out. It also makes it easier for me to hold the loop more like a needle… kinda! … so I can knit easier and more comfortably. Of course, I have to remember not to twist too much, but just a half twist, maybe a full twist if it’s being stubborn, seems to do the trick!
I’m not sure I’m explaining this very well and I don’t have a camera, so I can’t show you a picture. You’ll just have to take a word for it!