DIY home web site FineHomebuilding has a nice guide demonstrating how to wrap large cords and hoses for clutter-free storage while avoiding twists and kinks. With a medium-gauge cord, for example:
I drape the line back and forth over my hand until I have a few feet left. Then I tie off the bundle with the remaining cord and create a loop to hang it with.
The post itself has more detailed instructions for medium- and heavy-gauge cords, along with air hoses. If you've got a preferred method you stick to when wrapping your large extension cords or hoses, let's hear it in the comments.