This is a very old pocket trick. Tthe magician takes out a necklace from his pocket. It has three beads with two cords running through them.

The magician takes one of the cords from either side and ties a single knot. It is then covered with a borrowed hanky except for the four ends of the cords which remain outside. It seems impossible to take out the beads without the cords being cut. But the magician does exactly that.