As an EU resident, I can't trade in ETFs which do not have a publicly-available PRIIPs KID document, e.g. SPY, and most American ETFs; more specifically I'm not allowed to buy or short, though I would be allowed to sell if I already held a position. It does appear possible to purchase options on such an ETF (haven't yet, but broker seems to allow it).
Given that an option is a right, but not an obligation, to buy/sell the ETF, would an option in the money allow me to do anything? Would it be settled in cash? Or it would be completely useless? Would I be able to just exit my options position before expiry, but at worse fees(aka premium)/liquidity than if I could execute it?
UPDATE: I experimentally tested it by buying in-the-money close to expiration options and executing early, both call and put, on the cheapest underlying I could find. Upon exercise I did end up with the expected position in the underlying; however, the only allowed trade in the underlying was closing the position (whether it was after exercising a call or a put). I wanted to add my experimental method here in case others find it useful.