Referencing subtracts off the signal at the reference site. If analyzing LFP with an external reference, the reference screw needs to be somewhere electrically quiet, like cerebellum, so as not to introduce a new signal. If using an internal reference, this screw is just for grounding and thus can go anywhere. If not shorting reference and ground pads, add another screw anywhere on the skull and attach the wire from the ground pad (on the left, if the Sensapex holder is facing you during insertion) to that screw.