Outline Ellipse are a closed ellipse shape. This tool is accessed by default under the More Tools drop down on the Outlines toolbar. An Outline Ellipse is defined by five points – click the first point on the ellipse edge (pick surface if needed), then three more points further along on the ellipse edge (evenly spaced), then move the mouse to define the final ellipse shape so that it matches the shape being traced. Click to finish the Ellipse. Ellipses cannot be joined with other Outlines.
While in Ellipse mode, during drawing or after the Ellipse has been drawn, you can click and drag on any of the five points to refine the shape and position.
Note if the Ellipse cannot calculate (such as the five points being too linear), the Ellipse will draw as a polyline.