The first time a saw one I was amazed...I actually wondered if that was the hole in the o-zone we heard about in the 80s
My best recollection of an explaination is that the ring is caused by a layer of upper atmosphere ice crystals. They are common. We only see a ring because sunlight is only visably refracted at a certain angle between you and the sun. Imagine a mirrored ball directly between you and the sun. You wouldnt see a reflection because the mirror is in your line of sight to the sun. But move it in any direction away from your line of sight to the sun, and youll see its relfection...Did that make any sense?