After the variation is created for the item, you'll see the variants badge, with the total number of variations for that item.
Click on the Variant badge and you'll be displayed with the manage Variants pop up.
As seen in the image below the Option name is basically the variation options that will be displayed on the marketplace page.
The options for each option / variant name refer to image above.
+ Add Option
If you want to add a size along with color, click on the + Add Option button in order to add another variant option / offer multiple variant options.
Click here to learn more about managing images for variants.
Search Option values | + Add | + Add All | Remove All
Once you've manually added the Option names and the respective Option values, search for the Option values and + Add them individually or + Add All at once.
Once you add them, they will appear like so:
Variant option drop down.
Edit: Edit the variant
Remove: Will remove the variant. This will not however remove the Option value