While kids are tucked tightly into their beds, their littlest gifts can be tucked inside a quilt stocking. Use a thick old quilt or plushy bedspread to make it. With a cutout stocking template, you can easily decide which part of the blanket will yield the best-looking stocking. Position the template so that the top of the stocking falls along a hemmed edge to make sewing a snap.
Source: Martha Stewart Kids, Volume 16 2004
Position template so hem of quilt runs along top of stocking; cut out. Flip template over; cut a second shape, again using quilt hem for top edge.
Pin together, right sides facing; sew around edges with a 1/4-inch seam allowance, leaving top open. Turn right side out.
Sew ends of 5-inch ribbon to inside of stocking at back seam for hanging loop.
If you would like to line the stocking, cut two shapes from lightweight cotton; sew together, right sides facing, with 3/8-inch seam allowance, leaving top open. To hem lining, fold it down toward wrong side by 3/8 inch; topstitch in place. Nest lining inside stocking with wrong sides facing; hand-sew lining to stocking along top edge with a slip stitch. Iron flat.