I went shooting yesterday and realized I need a better spotting scope.   I need something I can see 5.56 holes in a target at a minimum of 200 yards?  Inexpensive would really be nice.   What kind of tripod would be good?

In my experience with optics of any kind, you get what you pay for.  I'm saving for a Vortex razor 80mm.  I've heard good things about them.

I used this version for awhile:

Konus Spotting Scope

If you turn the power all the way up, the picture will dim somewhat - not a huge amount, just somewhat. At 35X though, it's perfect for rimfire shots @ 100Y, or centerfire out to 200Y. I still see a fair number of these on the line at matches. They are a good entry level spotting scope. Stands vary, but a decent photographic tripod won't set you back that much.

Would 20-60x60 mm be minimum?

I would like it to be under $200 but from what I am seeing here and in the team forum I will have to add at least another $100 or maybe even $200 more.

Check your local Craigslist from time to time.  You can find some deals there on occasion.



 

This one is a little bit more but judging by the pics you should be able to see the holes at 200yds pretty easy plus it's a hell of a spotting scope for the money.
http://www.ar15.com/forums/t_16_5/3872_Bushnell_LEGEND_TACTICAL_15_45x_60mm_T_Series_spotting_scope.html

Spotting scopes are best used for two things:

Reading and calling bullet trace
reading and calling wind

While reading a target is a secondary function, an 80x magnification spotting scope should be able to resolve impacts/ holes on a target at 200 yards.

If you're going to use a spotting scope, I'd go with an objective lens that has as large a diameter as you can afford.
But here's the funny part about that: you probably don't want to use the highest magnification all the time.
Most of the time the large objective lens will simply gather a lot of light for you, high magnification settings have a tendency to pull you too close to your target.

Most of the time a lower magnification setting will provide a wider field of view to spot for wind or trace.
You can always crank the optic up to obtain bullet impacts or holes.

A good tripod is just as important when using a spotting scope, using a tripod that is too light or not weight-appropriate will effect the stability of your optic.

ETA: I'll give another +1 to Konus optics, they're really good for the cash.

I've got an Alpen 15-45x60. Under $200 tyd. On a good day, 223 holes on white paper or a shoot and see targets at 300yds  are possible. Throw in bad light or dark background and it's no good for 223. But 270 and 30 are GTG.
Tripod is a regular camera tripod. Hint, the lower you leave the legs, the more stable the tripod.
This setup is acceptable to me. I'd rather buy higher end rifle optics and ammo than spend $1100 on a spotting scope.
The experience taught me you get what you pay for.  Several low end spotters lose their fine focus on high mag. Which is a bummer. That's where  you'd think they'd be GTG. Mine is better just below high power, even at extended range.
If your going to need competition grade optical quality go for it. If you just want to save some steps at the range, do your research on what fits your budget.
Good luck!

I'll add to this rather than outright disagree with the bolded line, as the rest of the post addresses some of the other issues involved.

1.  Magnification does not equal resolution.

Resolution is a function of the diameter of the objective lens and the quality of that lens.

The theoretical diameter needed is determined by the Dawes limit, but that's also a theoretical limit that applies to resolving a bright light against bark back ground and in most cases you're only going to resolve about half that limit even in astronomical situations with good seeing conditions.  When you are looking through the very turbulent air right next to the ground you'll do far worse than that.  Higher contrast helps and you can usually see a hole in a buff back ground much farther than you can see a hole in black bullseye, unless the target is against  avery bright and light colored background.    

Lighting conditions also play a huge role and the lens system needs to produce enough light and enough contrast to make out the hole.

The more magnification you have, the more light is required for any given objective lens size and once the magnification gets too large for the objective lens the exit pupil becomes too small to be useable by the shooter, and it will also increase eye strain.

In general exit pupil is generally determined by dividing the objective lens by the magnification.   For example, the standard 7x35 binoculars have an exit pupil of 5mm, which is fine for day light use by most people.   However the larger 7x50s offer a 7.14mm exit pupil that allows more efficient use of the fully dilated, dark adapted pupil in younger adults.  

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Applying that to spotting scopes, a 60mm spotting scope at 20x has a 3mm exit pupil.  That's fine for average day light condition (partly cloudy skies) where pupil size is 3-4 mm.  Increase the power to 30x however and the exit pupil is only 2mm, and that requires bright sun conditions where the pupil size will be a similar 2mm in diameter.   Push the magnification up to 40X and the scope isn't really usable at all as the 1.5mm exit pupil will probably be less then the pupil size leaving you unable to use much of your foveal vision, and it will be hard to use, quickly resulting in eye strain.

The main advantage of a larger objective lens in a spotting scope is that, assuming identical levels of quality, the larger lens's greater light gathering ability can generate more usable magnification for a given light level.   Increasing the objective diameter to 80mm will increase the exit pupil at 20x, 30x and 40x to 4mm, 2.7mm, and 2mm respectively.   However at an absurdly high 80x, the exit pupil is only 1mm and will be all but unusable.

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Now...you can go larger than 80mm but the cost will be prohibitive and the size of the spotting scope gets well beyond something that is easily portable in the field.  Short refractor spotting scopes with large objective lenses also require very short focal ratios and short focal ratios aggravate problems with chromatic aberration, which not only produces false color (purple fringing around bright objects, etc) but also reduces resolution as the red, blue and green wavelengths of light are all focusing at different points, costing image sharpness and clarity.  

The solution to that is to get into either Achromatic lens doubles or Aprochromatic lens triplets for the objective lens, or use Extremely low dispersion (ED) glass.  The cost increases from Achromatic to ED to Apochromatic lens systems, and that cost is closer to being exponential than linear.  

The same thing also applies to the jump from 60mm to 80mm objective lenses, and the cost increase again for similar quality lenses is closer to exponential than linear.  Given the same price point a 60mm scope may well give much better resolution than an 80mm scope due to better quality lenses in the smaller scope.

Variable spotting scopes have more lenses internally than fixed power spotting scopes and they tend to have more internal reflection so they need more light for the same throughput, and alignment of the lenses is much more difficult to achieve, so resolution and sharpness of focus can suffer.  In other words cheap variables are usually poor performers and at any price point and level of quality  a fixed power scope will have better performance than a variable.

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Lens coatings also matter.   You never want to get a spotting scope with less than "fully multicoated optics".  The quality of the coatings and the accuracy of there application are vital and val in the "get what you pay for" category, but if the optic only says "coated", "fully coated" or "multicoated" you want to avoid it as they are either not multicoated against reflections in different wave lengths and/or not all lenses in the system are coated.

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In short:

1) Buy as much spotting scope as you can afford;
2) Never look through optics you cannot afford (it leads to scope envy and dissatisfaction with that is ion your price range);
3) Never go smaller than 60mm;
4) If given a choice between objective size and lens quality, buy quality;
5) Never consider the magnification above about half a variable spotting scopes range to be useable; and
6) Never consider magnification above 15x for a 60mm scope or 20x for an 80mm scope to be usable on an over cast day, and 30x and 40x respectively on a bright sunny day.

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With all that said you can resolve .224 caliber holes at 200 yards with a good 60mm scope, but it won't happen over warm ground with lots of mirage and thermal activity as those differing air densities and current will refract the light between you and the target and ruin the resolution that the scope might be capable of.

An 80mm scope will improve the range of conditions under which you can see the holes, but you'll be doing it at 20-40x, not 60 or 80X, so don't even bother with magnification over 40x - and don't be swayed by marketing that focuses on maximum magnification.    

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Another option is a comparatively small Maksutov Cassegrain spotting scope.  You can get a 127mm MaK Cass for about $400 and it will offer:
a) .91 arc second resolution compared to the 1.45 arc second theoretical resolution of a 80mm refracting spotting scope;
b) it will be operating at a much more focus friendly focal ratio of f/12 compared to about f/5; and
c) it will have zero issues with false color (it's a reflector not a refractor so no light waves are being significantly bent).

The downside is that while the length is similar the diameter is larger and it will weight about 8 pounds rather than 4 pounds.

You might find that a 90mm or 102mm Mak Cass is the sweet spot.

A 102mm Mak Cass can be had for about $300 and will be operating at about f/12.7 with a resolution of 1.13 arc seconds and will weigh about 5 pounds.  

A 90mm Mak Cass will cost about $240, will have a resolution of 1.3 arc seconds and will weight the same 4 pounds as an 80mm refractor.

With the included 25-26mm eyepieces the above scopes will produce 50-60X.  60x in the 127 creates an exit pupil of 2.2mm, while the 50x in the 102mm and 90mm scopes produces between 1.8 and 2mm.  For cloudy days you'll want to add a large eye piece in the 32mm or 40mm range.  A 40mm lens in the 127 will still produce 38X and an exit pupil of 3.34mm.

Any of the above will give you maximum bang for the buck, provided you don't need an armored body and a high degree of in the field portability.  

I bought a Bushnell Sentry at Academy for $129.00 that will see 223 holes at 200 yards. I picked between 3 in stock. The other 2 did not look as good. I don't know how well it would work past that for bullet holes, but I can see screw heads on chimney caps at 500 yards acording to Google Earth.

I don't know if it is common for the same model spotting scope to work better than another, or if the other 2 I looked through were defective.

This is an amazing explanation of resolution.  I'm writing it down

Sir, FWIW I shoot High Power Competitively.  That said I will agree with a comment posted by Mr. Tweeter:  The purpose of the spotting scope is reading the wind for purpose of sight adjustment.  With some exceptions the most popular scope on high power ranges is the Kowa TSN 821 or newer 821M SV versions.  The older versions use a 28X eyepiece and the newer ones have a 25X both on the 82mm objective lens.  There are other eyepieces available including a 20-60X zoom.  Since targets are scored in the pits during competition it is not necessary to have a scope capable of seeing the shot holes, put during practice on the 200/300 yard range I use my scope to see the shot holes all the time.  The 28X version eyepiece can see the .22cal holes in the aiming black in most light conditions but it is quite true that mirage will sufficiently distort the image sometimes.  At 300yd I use the 20-60 zoom lens to see the shot holes but it's not always possible given mirage.  The Kowa scope may be out of your price range but I see used ones on Ebay occasionally with excellent prices.  HTH, 7zero1.

I recently bought this one and am quite happy with it.  It is heavy and bulky but the glass is very good and the controls are smooth.

I bought a SLIK tripod to hold it for $80 so I've got right at $500 total in it.

I could easily spot my 6.5mm holes at 250 yards on a sight in target.  

Bushnell Legend Ultra HD

It's out of your budget but hard to beat for the price.  You have to go double to get improve upon it IMO.

My price range was the same as yours when i picked up a deal on a Celestron Ultima 100. It resolves just great at 200, and thus far fine at 600. Like everything, its a series of tradeoffs, and in the case of the Ultima 100 its the size. Its pretty big. But, i got it for $215.  Now, recently ive started looking for something much smaller that can fit in my gear bag and has a reticle of somekind. Bushnell Legend as suggested is on my list.

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I have the Celestron Ultima 65($120), been using it for about 4years or so, works great for my needs shooting to 1100yds. 

That review is crap.

Optical performance is merely a description of the optics as given in the marketing brochure.

There is no discussion of resolution (line pairs per millimeter), chromatic aberration, eye relief, etc.

They did not evaluate any KOWA's, the most popular brand I know of.

They compare $1600 scopes to $120 scopes.

In optics, you get what you pay for.  Never more.  Sometimes less.

That was posted on Calguns by what I assume is the same person/bot.

I am in the marked for a spotting scope as well.   I have used a friends Vortex for 600 or 700 yards when he was shooting.  glass was really nice.  I have a sightron 10-50x60 on my 308 rig and have used that as a spotting scope for other shooters who needed a spotter.

Do you really though?

I have a Celestron Ultima spotting scope that goes up to 66x that I paid $230 for. It works OK, I notice the view gets a little cloudy/dims at higher magnification.

I have been looking at Vortex's Razor HD 27x60 spotting scope. A google search shows people selling it at $1599. I am sure it is a better unit and I know Vortex's VIP warranty is the balls. My expectation is that it would be clearer/brighter at higher magnification. Will it be $1370 clearer/brighter?

The biggest issue I have run into with the Celestron is the mirage on hot days. It can be a HUGE ass kicker. Is the mirage the mirage whether you have flea market quality glass or high end glass OR does the improved view from the higher end glass also tame the mirage?

My thoughts exactly, the atmosphere you look through dictates what one can see much of, if not most of the time.

Why waste $1000 to look at mirage?

Yes. My biggest question is will the improved resolution of a higher end spotting scope help "cut through" some of that mirage or did I drop another grand just see more mirage?

Your mirage will have great resolution and very little chromatic aberration.

But seriously, mirage will not be improved by a better scope. It is like a clear shower curtain, it doesn't matter what you use to look through it, you just wont get a clear image through it.

On good days your quality spotting scope will be money well spent I guess, here in south Texas there seem to be very few days where I don't see mirage. I just don't see the benifit for me in getting a better spotting scope. 

I shoot steel over 200yds and the $120 Celestron allows me to see splashes to 1100yds. At 0-200yds on paper I can see .223 holes just fine so why upgrade?

To add: I am 100% on board with getting the best rifle scope that one can afford because it mechanically has to function near perfectly but a spotting scope to look at mirage, is a place to cheap out on IMO...