A magician walks up to a girl and asks her to feel the rabbit in the magician's hat.
The magician asks the girl to rub the rabbit. The girl notices the rabbit sticks up and drools; the hat was covering the hips.
Alright listen up, buttercup. This joke is all about fooling you into thinking it's a cute magic trick but it's really about something else. The magician wants the girl to touch his "rabbit" (wink, wink) hidden in his "hat" (nudge, nudge). And the hat covering the magician's hip is the punchline. You probably thought magicians were cool and mysterious, didn't you? Well, news flash, you're as gullible as they come!