Unless your client's trading include straddles and hedging transactions (for which the brokerage should provide a detailed report), you should choose 1 for 1256 contracts.  Your entries will then flow to Part I of F.6781 for the 60/40 treatment.

Box 8 is what your client realized for transactions that were closed during 2018.  Since 1256 contracts are marked-to-market, part of that gain realized had already been recognized in 2017; Box 9 is to adjust for that gain/loss recognized the previous year, so that there wouldn't be any double taxation.  Box 10 is for contracts that are still open as of Dec 31, 2018 and subject to mark-to-market based on the 60/40 rule.

Based on what was reported on your client's 1099-B, it seems like your client was not a heavy trader, he/she probably had only what was left from 2017, and just let that remaining contract(s) (maybe an index option) expire sometime during 2018.  As a result, there is a loss of $1,234 (yes, I remember it's a fictitious number), which would be split 60% for LTCL and 40% for STCL.