Tatting is the process of making a durable, snowflake-like lace by knitting a series of knots and loops. These loops are made by making double stitches over a core thread. Gaps are often left between these double stitches, both for ease of construction and for aesthetic purposes. These gaps are called picots, and by making a picot gauge you can ensure a uniform size among them.
Set your paper clip down, so both the inner point and the outer point are facing to the right.
Cut the inner bend of the paper clip off.
Cut the paper clip slightly after the curve on the right.
Make a cut after the left bend of the paper clip. This will remove that side entirely, which is exactly what you want.
Bend the remaining curve into an eye loop.
Tie a thread to the eye loop.
Tie a slipknot on the other end of the string. This is to slip your thumb into. You are now ready to start using the paper clip as a picot gauge.