Lol means laugh out loud, so you found something that the other person said funny enough to actually laugh. It is a way in texting to show how funny you found the other person's text.

大声笑. There also ROTFL (or ROFL) which means, "rolling on the floor laughing. My favorite is the Japanese （笑）. That says it all.

https://en.m.wikipedia.org/wiki/LOL Additional info for similar ‘initialisms” lmao, rofl, rotfl

As far as I know, LOL means Laugh(ing) Out Loud. It is a common Internet Slang.

LOL, - Laughing out loud.