[jQuery] what does options mean ???

I am looking through some previous made code and I notice a special varible
called options. I suppose it special because my html editor gives it a
purple color that stands out as if its a predefined varible. the code looks
like something below

$('#begin').click(function(){
$('#log').val('')
$('#display').val('')
log('Started recording: ' + duration + 'ms')

$.Events({ duration: duration }, function(){
$('#display').val(this.exportJSON())
log('Finished recording')
})
})

// Then the plugin recieves it like this

$.Events = function(options, callback) {
if (callback) options.finished = callback
return (new Eventer(options)).start()
}

// I understand that you can pass variables in a parameter through an array.
is this options keyword a way to present the values in the the array ???

If so then where did this finished varible come from. can you add more
varibles to the keyword 'options' ???
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