These instructions apply only to Spark EXE installations (probably all install4j based installations, so also Linux), MSI installations will not work.
To add JVM parameters to Spark one needs to create the file "Spark.vmoptions" (not "spark.vmoptions" and not "Spark.vmoptions.txt") within the same directory as Spark.exe. Only one JVM parameter is allowed within every line.
To verify that the file is used one can monitor the memory usage and log it to a file. To do this add
to the Spark.vmoptions file. Later one can use the collected data in c:/temp/spark.gc.log (c:... for Windows users) to tune the memory settings.