Correct Answer: OPTION

Solution : Given:
OPERATION

First option: CAPTION; C is not present in the given word OPERATION. All the letters of CAPTION are not present in the word OPERATION.
Second option: ROTATION; Two T's are not present in the given word OPERATION. All the letters of ROTATION are not present in the word OPERATION.
Third option: OPTION; All the letters of OPTION are present in the word OPERATION .
Fourth option: NATION; Two N's are not present in the given word OPERATION. All the letters of NATION are not present in the word OPERATION.

So, from the above, only OPTION can be formed using the letters of the word OPERATION. Hence, the third option is correct.