You cut out a shape within an existing shape
so that the layers underneath show through. This procedure shows
you how to create a doughnut shape, but you can use this technique
with any combination of the shape tools, including custom shapes.
Select
the Ellipse tool in
the toolbox. It may be hidden by one of the other shape tools or
the Line tool .
In the options bar at the top of the work area, select
the Shape Layer button .
Drag in the document window to draw the shape. Hold down
the Shift key while dragging to constrain the ellipse to a circle.
In the options bar, select the Subtract From Shape Area
button .
Drag within the new shape to create the cutout. When
you release the mouse, the image underneath the new shape shows
through.
To reposition either shape, click the Path Selection
tool in
the toolbox (it may be hidden by the Direct Selection tool ), and
select the path. Drag it to its new location or use the arrow keys
on the keyboard to nudge it a pixel at a time.