What is the literal meaning of 'Tripitakas'?

Three baskets to hold different types of texts.

The correct answer is Option 2 - Three baskets to hold different types of texts.

The Buddha (and other teachers) taught orally – through discussion and debate. Men and women (perhaps children as well) attended these discourses and discussed what they heard. None of the Buddha’s speeches were written down during his lifetime. After his death (c. fifth-fourth century BCE) his teachings were compiled by his disciples at a council of “elders” or senior monks at Vesali (Pali for Vaishali in present-day Bihar). These compilations were known as Tipitaka – literally, three baskets to hold different types of texts. They were first transmitted orally and then written and classified according to length as well as subject matter. The Vinaya Pitaka included rules and regulations for those who joined the sangha or monastic order; the Buddha’s teachings were included in the Sutta Pitaka; and the Abhidhamma Pitaka dealt with philosophical matters. Each pitaka comprised a number of individual texts. Later, commentaries were written on these texts by Buddhist scholars.