How come the moon sometimes has a halo around it?

Remember that the highest clouds in the atmosphere are called Cirrus clouds. These clouds have refractive effects on visible light that can actually produce a pattern that appears like a halo. The angle of light incidence necessary to produce this spectacular effect is around 22 degrees.

Much smaller colored rings sometimes surround the moon also. These are not a halo but a corona produced by the diffraction of light by the water droplets of clouds. And of course moonlight can create a rainbow effect, although to the unaided eye it is usually hard to observe. Good viewing on a cold late February night.