options are a type of financial derivative. For example, lets say Bob wants to buy seeds for his farm at the end of the year, but he only wants to budget $1000 to buy them. He is worried that the cost of seeds might go higher, and he wouldn't be able to plant next season.
So Bob makes a deal with Alice. Bob pays Alice $300 now for the right to buy the seeds for $700 at the end of the year.
But, if the price of seeds turns out to be less than $700, Bob is allowed to choose to not buy the seeds from Alice. He can buy them cheaper somewhere else.
Since Bob has the option to either buy the seeds from alice or not, this type of financial agreement is called an option.
Options are historically popular because only one of the 2 participants in the relationship needs to be trusted. Options are a good fit for blockchain for a similar reason. Since only one of the 2 participants needs to be trusted, only one of the 2 participants needs to have money locked up in the channel for the duration of the contract.
So from a customer's perspective, options are nice because you can participate in similar financial contracts, but you don't have to lock up as much money in a channel.