What is the exact meaning of LOL?
LOL stands for laughing out loud or laugh out loud.
LOL is the English word which was first used in 1980.

According to OXFORD Dictionary,
The word “LOL” used to draw attention to a joke or amusing statement, or to express amusement.
for example you can say that – “I love how you said ‘coffee is not my cup of tea’. LOL!”

Where do I use this word LOL?
The abbreviation of LOL is laughing out loud or laugh out loud.
LOL is commonly used in  chat rooms, instant messaging, text messaging, Mobile SMS, e-mail and other real time text-based communications as like as FaceBook Chat, Instagram. Twitter, WeChat, IMO, Viber, Line, tango chat and other social media communication.

How to Use this word LOL?
Lol can be used as an interjection.

Most of the people like to write LOL in all caps. But some people don’t use and the do not like to use this kind of words. Because always remember that you cannot use LOL in formal communication.

Can I use LOL in formal Communication?
No, Because LOL means laughing out loud or laugh out loud. So you cannot laughing out loud in any formal communication. If you use this word in formal communication, other will think that you are a buster.

What kind of communication I can use this Word LOL?
Using all caps is a way to emphasize what you’re writing in electronic communication, so LOL might indicate that you really are laughing out loud. Lol is not a word you’d want to use in formal communication, and there are no hard rules about how to capitalize it in informal communication.

Suppose you are talking/chat with or among your friends, here you can use this word “LOL”

Lol is also used in spoken language, even though saying lol creates a contradictory situation where you’re saying that you’re laughing out loud instead of actually laughing out loud.

Examples
He was tell us a story which  was a great joke! lol!
I lol’ed so hard watching ITTADI in BTV.
I lol every time when I hear the news  of your squirrel with your wife.

Thanks for your questions, Hope you are now clear about the word LOL. What is LOL? Where to use, how to use.
If you have more questions, Ask me.