A field can be optional (O), conditional optional (CO), conditional mandatory (CM) and mandatory (M).
Optional: it's up to you whether to fill in a field value
Conditional optional: a field value can only be filled in if a condition is met (such as another field having a value filled in). Otherwise, the field should not be filled in.
Conditional mandatory: a field value is required under certain conditions (validation rule). Otherwise, it is optional to fill in the field.
Mandatory: a field value is always required.