BO stands for bind off.
There are many ways to bind off stitches in knitting, but the most common and simplest way is like this.
Knit 2 stitches to begin. Now, using your left needle, pick up the furthest stitch and pull it over the closest stitch and off the needle. Now knit 1 more stitch and again bring the furthest stitch up and over the closest stitch, and off your needle.
Continue in this way.