here's how I have learned it:

down by the banks of the hanky panky
where the bulfrogs jump from bank to banky
singin' E,I,O,U,A,S
slap, you're OUT!

players form a circle with their left hand under the left player's right hand and their right hand on the right players left hand. players would circle clockwise,using their right hand to clap the next player's left hand in turn. on the word 'OUT',the player about to be clapped tries to pull their hand out. if they succeed, nobody gets out and the game continues. if they are clapped, they are out, the two surrounding players link the circle back together,and then the game continues.

final round:
when only 2 players remain, they hold right hands and put their left hands out in alignment with the right hands.they swing their right hands to smack the left hands in turn. on the word 'OUT',the person about to be smacked tries to pull their hand out if they succeed,a new round takes place. if not,the remaining player wins! bye!:)