Someone out there is betting big that the bad days for

Excite@Home's

(ATHM) - Get Report

stock are over.

Excite@Home, an online service provider and content company, has seen its stock get hammered this year, and as of Monday's close was off 62% year to date. On Tuesday, it was off 3/16 to 15 15/16.

In options land, the volume in the August 15 puts on Excite@Home has been staggering the last couple of days, and most of that has been put selling.

While put buyers are typically seen as bears, put sellers take in a premium against the risk of the stock falling and having to purchase shares at the strike price (15, in this case) to fulfill the contract's exercise. That makes the basic strategy of a put sale bullish because the seller profits from the stock rising, or sitting still because the options expire worthless.

Judging from the trading, someone is betting on a rise in Excite@Home's stock, or at the very least that the pain shareholders have endured this year is about over. So far this week, nearly 24,500 August 15 puts have been sold on the

Chicago Board Options Exchange

, according to one market source.

On Monday, 20,300 of the August 15 puts traded, compared to about 6,200 contracts already in play at Friday's close, signaling those were new positions. Some of those positions were closed, however, and open interest stood at nearly 15,000 contracts as of Monday's close, still a whale of a lot more than the open interest as of Friday's close.

According to the market source, the August 15 puts have been sold at between 3/4 ($75) to 13/16 ($81.25). The selling is apparently coming from a customer who is most likely speculating that the stock price of Excite@Home is going to rise, or at the very least, isn't going to keep sliding.

By selling the puts, the customer is speculating that the Excite@Home stock isn't going to fall below 15 and the option will expire worthless and thus the seller can keep the premium collected for selling the contract. Or, worst-case scenario, even if Excite@Home's stock falls and expires in the money, and the customer is put the stock, the customer won't mind owning the stock at 15. August options expire on Friday, Aug. 18.

The August 15 puts were trading down 1/16 ($6.25) to 3/4 ($75) Tuesday on the CBOE on volume of 4,449 contracts.

Options action in

Interstate Bakeries

(IBC)

, which in the

past has caught the attention of options market analysts, has picked up again recently.

After the close Monday,

Ralston Purina

(RAL)

announced it signed a pact with IBC to sell a total of 15.5 million shares of IBC common stock to IBC by Sept 1.

The transaction is slated to be completed no later than Sept. 1, 2000. It will reduce Ralston's holdings to 29.5% of IBC's then shares outstanding.

IBC has been the subject of takeover rumors in the past, putting its options on the radar screens of market analysts. However, thus far, nothing has ever come from the IBC takeover chatter. IBC, based in Kansas City, Mo., makes Wonder bread and Hostess snack cakes. Rumors of a potential takeover swirled again last week.

But on Friday, the company released a statement, in response to market rumors that it was going to be acquired by

Grupo Bimbo S.A. de C.V.

, stating that the rumors were false.

On Tuesday, with IBC's stock surging 2 1/16, or 12.6%, to 18 1/2, there was heavy volume in its August 20 call options, where 790 contracts have changed hands. The August 20 calls were up 3/8 ($37.50) to 1 1/8 ($112.50).

The debut of the smaller version of the CBOE options contract on the

Nasdaq 100

has been delayed until Aug. 11, after originally be scheduled to begin trading yesterday.

A CBOE spokesman said a variety of issues still needed to be resolved, including ironing out licensing arrangements and getting marketing materials ready. The new contract will be 1/10th the size of the current NDX options contract, according to the exchange. The ticker symbol for the underlying will be MNX, the CBOE said.

Wolverine Trading

will serve as designated primary market maker in the product.

The new contract will offer investors a product to trade that is closer in size to the wildly popular options contract on the

Nasdaq 100 unit trust

(QQQ) - Get Report

, but not as small. Options on the QQQ trade at the

American Stock Exchange

.

Options on the regular NDX at the CBOE are almost entirely traded by institutional investors because of the size, and subsequent cost, of the contract.