Not everyone on Wall Street thinks tobacco is going to get smoked.

And the nonbelievers are showing up in the options pits, jumping into the usual panic swirling around tobacco stocks -- especially after an Oregon jury found

Philip Morris

(MO) - Get Report

responsible for the death of a man from lung cancer two years ago and awarded a record $80.3 million verdict.

But options investors also took some unusually large bets in Philip Morris options going way out to 2001, trading that could be a smoke signal indicating that the bellwether cigarette manufacturer, and the tobacco industry overall, could bounce back.

By 2001? Well, that's for the market to decide. But it's an interesting long-term bet to ponder on a day when it seems like tobacco investors smell evil in the industry all over again.

Some unsurprising suspects in options flagged: Philip Morris' June 37 1/2 calls dropped 1 3/16 to 1 7/16; June 35 puts and calls saw heavy volume.

RJR Nabisco

(RN)

April 27 calls dropped 9/16 to 7/16 on heavy volume. Meanwhile, RJR stock was getting ripped, down 5.5% to 26 3/16.

But, according to one New York-based trader, options investors placed some hefty bets with roughly 3,300 contracts (also known as LEAPS) in Philip Morris January 30 calls going out to 2001. That volume represented about one-third of the open interest, not too shabby on a day when most investors are fleeing tobacco.

"Calls going out that far were a hundred times more active than puts, and while that doesn't tell us whether the sector will be up or down, it does mean people are looking ahead at a rebound," the trader says.

"Tobacco is the story today," adds Tom Burnett of

Wall Street Access

in Manhattan. "People are setting up their bets" -- for when the smoke clears.

LEAPS, shorthand for long-term equity anticipation securities, are simply long-term options. LEAPS are like any other options except that rather than expiring in 30, 60 or 90 days, they expire up to two years from the current date.

Takeover talk resurfaced on

Republic New York

(RNB)

, and this time the market is back with

Bank of New York

(BK) - Get Report

said to be the latest to be heading to the M&A altar. Take a look at May 50 calls, which jingled up 3/4 to 2, or $200 per contract, on volume of 280, compared with open interest of 245. Republic New York stock racked up gains of 4.3% to 46 5/8. Just thought we'd mention it. Again.

Finally, options players on stock swaps, take heed. Texas-based

Conoco

(COC)

, a Houston oil concern, was partially split off from chemicals giant

DuPont

(DD) - Get Report

through an initial public offering in late 1998.

Conoco recently filed with the

SEC

to split off the remainder of the company from DuPont. Conoco is still 70% owned by DuPont, and Conoco will become fully independent in the near future after the divestiture deal.

When? At what price? Well, that's what the betting is on. The stock budged just a teenie bit -- up 1/16 to 58 1/16 -- but DuPont January 65 calls dropped off on decent volume today.

These options "could be an interesting way to play energy, oil prices and the stocks themselves," says Brent Houston, a managing director with the

Mr. Stock

discount firm in San Francisco.