If you use the ellipse tool and you have one layer selected - it will create a mask on that layer. if your background is set to black - you will see black around the layer (with condition that there are no other layers around/below it). if there is no layer selected, or if you have more than one layer selected - it will create a shape. try it.
I am using after effects but when I use the elipse tool instead of making a circle it makes everything around where I selected black any help?
You need to read up on the difference between using the shape tools for masks vs. actual shape layers and how this is determined by selecting layers first or not.