Peel the onion and slice it into thin, ⅛-inch slices. Separate the slices into rings and place them in a jar large enough to accommodate all of them (a 1-quart jar should work). Make sure you use a glass jar that can withstand hot, near-boiling water.
In a small saucepan, combine the vinegar, water and salt. Add the bay leaves and the peppercorns. Bring to a boil over high heat, stirring until the salt dissolves.
Turn the heat off. Remove the saucepan from heat and allow it to rest and slightly cool for about 5 minutes.
Pour the liquid over the onions. With a spoon, press down on the onions to make sure they are well-covered.
Close the lid tightly and allow the jar to sit at room temperature for 2 hours before serving. Alternatively, you can cool it at room temperature for about 1 hour, then refrigerate until ready to use. Refrigerate the leftovers for up to a week.