
As you can see in the image the red area is not tall enough to cover the whole glyph so the top and bottom get cut off by one pixel when exporting. Is there any way to alter the height of the red or is it stuck like that?

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As the tooltip for the checkbox instructs, red area is your Ascent - on the second tab.
You should also adjust Baseline on the first tab so that the bottom of the letter sits on it.
Also note this topic about trying to export an outlined font.