Final answer:
The Magic Wand tool's Anti-alias feature is used to create smoother-edged selections, reducing jagged edges for a softer transition between the selected area and its background.
Step-by-step explanation:
The option in the Magic Wand tool that creates a smoother-edged selection is the Anti-alias feature. When the Anti-alias option is checked, it allows the Magic Wand to select pixels at the edges of the selection area in a way that produces a softer transition between the selected area and its surroundings. This helps prevent the 'jagged' edges that can occur when selecting regions with a high degree of contrast or complexity. The Anti-alias feature is particularly useful when you are working with images that require precise selections, such as when isolating a subject from its background for graphic design or photo editing purposes.