When you have an obligation to be somewhere, but decide you would rather not and go do something else instead, like go hang out with friends or go home and sleep. This alternate action is almost certainly frowned upon by the coach/authority figure and by those who are truly committed to the activity.
"Going to football today?"
"No man. I'm taking the option and going to dairy Queen instead. Wanna come?"
"No one is here today? What the hell?"
"Everyone took the option instead."
"Well that's lame."