It's intended purpose is to hold your needle for you when you're not stitching or quilting. Simply place your fabric between the magnet on the bottom and the top metal design piece.
You can also put the magnet on your lamp if it is metal and rest your needle there.
Other uses include wearing it as a pin, using it as a scarf button, adding it to a hat for decoration, or simply displaying them as you build your collection.
Due the powerful magnets needle nannies should NOT BE WORN NEAR A PACEMAKER.