B

Step 1: Understand that when a watch spring is wound, it stores energy in the form of potential energy due to its elastic nature.
Step 2: The energy stored in the spring when it is wound can be categorized as elastic potential energy (P.E.), which is the energy stored when the spring is deformed (stretched or compressed).
Step 3: The formula for the elastic potential energy stored in a spring is given by:
$$ P.E. = \frac{1}{2} k x^2 $$
where $k$ is the spring constant and $x$ is the compression or stretch from its equilibrium position.
Conclusion: Therefore, the energy stored in a wound watch spring is best described as Potential Energy (P.E.).