I think maybe the key is to go only until your lower back starts to round and lose its arch. Whether or not you go parallel will depend on how flexible your hamstrings are and how much you bend your knees exactly. I know that I can go right about parallel before my knees start bending more and my butt starts sticking out more as I sit back to maintain balance.
But I do think the key is not to let your lower back lose its arch because the flexion will start to open up your vertebrae and put outward pressure on your disks, and that's bad.
It may be a good idea to have someone watch for this cue. When doing this myself in front of a mirror, I've found that I'm surprised by how it looks versus how it feels. My lower back actually starts rounding a lot sooner than I feel like it does.