How Does the Exercise Style (American Vs. European) Relate to the Settlement Choice?

The exercise style of an option dictates when the holder can choose to execute the contract: American options can be exercised anytime up to expiration, while European options can only be exercised at expiration. The exercise style is distinct from the settlement choice (cash or physical).

An option can be American-style, but still cash-settled, meaning the right to exercise early results in an immediate cash payment based on the current price difference.