There's no "16:9 option" but there are resolutions that happen to be 16:19 such as 640x360, 1024x576, 1280x720 or 1600x900.
If you do not have any 16:9 resolutions available in LFS for some reason you could always use an application such as Sizer, create a preset, and then apply that preset on the LFS window.
Just go into your LFS settings, choose a resolution that is 16:9, press shift+F4, and record. I personally record in 720x480. Using the same resolution in game, and in the studio, looks better than shrinking a large resolution and adjusting the aspect ratio.