Optimising your images for WordPress is very important as it helps with your site speed and thus your SEO efforts. The situation that we have with images is that they contain some "extra calories" and are "over weight" in having excess unnecessary kilobytes.

We have to optimise the images by compressing them in a manner that does not compromise quality. Thus, we have to put our images on a diet and shed the excess kilobytes yet still remain with quality photos for our readers to see.

That is where the term "lossless" comes from, the images are compressed in a way in which they shed the extra kilobytes without compromising the image quality.

You should be familiar with at least one form of "lossless" conversion and compression - JPEG, which is, for professionally taken photos a compressed version of the raw file that can be several megabytes in size.