This is a sucker effect where the magician explains the how of the trick, but then ends the trick with a climax that fools the audience, implying real magic.  Performer shows a colored handkerchief in his hand.  He rolls it between his hands, and it changes into an egg. He now explains that he actually uses a hollow egg with a hole in it.  When he rolls the silk between his hands, he pushes it inside the egg through the hole.  He repeats the performance to demonstrate this.

Next comes the real magic!  He makes a magic gesture over the egg and it changes into a real egg! He breaks the egg in two, pouring out the yolk and white.  We supply you with the special plastic egg and a colored silk handkerchief.  You supply one real egg.