Which situation can lead to cash settlement instead of physical delivery due to a high number of options in-the-money?

The situation that can lead to cash settlement instead of physical delivery due to a high number of options in-the-money is related to the delisting of the underlying asset. When an asset is delisted, it means that it is no longer traded on the exchange, which can create complications for the settlement of options. In such scenarios, instead of executing a physical delivery of the underlying asset, which may no longer exist within the market framework, cash settlement becomes the practical solution. This allows for the options holders to receive a cash equivalent based on the in-the-money value of their options, circumventing the logistical issues that would arise from attempting to deliver or receive the underlying asset that is no longer available.

The other scenarios do not inherently lead to a requirement for cash settlement in the same way. Market fluctuations, while impacting the value of options, do not directly cause a shift to cash settlement. Temporary trading suspensions are often resolved and do not imply delisting. Additionally, disputes between exchange participants are typically resolved through regulatory and contractual means and do not necessitate changing the settlement method to cash.