This is a tricky week for option players.
On one hand you have a half day and a full day off from the markets, which is like a synthetic weekend. And as soon as we get back we have a single day before the actual weekend starts.
But on the other hand, we have a major piece of economic data (Jobs #'s) coming up on Friday and potential gap risk from Japan.
Normally what happens as we head into a holiday is that implied volatility (the VIX) will start to sell off as the market begins to price in those extra few days of theta.
But right now, the VIX is being stubborn and is not collapsing hard.
This is most likely because of that data on Friday, as well as any macro risk coming out from Asia.
Traders are covering or hedging short option positions to prepare for any overnight and pre-market shenanigans,
What is interesting about today is that the covering is actually happening with a long bias. The majority of calls are being bought today, and the majority of puts are being sold [EDIT: This just changed]. So it's not just the potential downside risk, it's the potential upside risk.
What will most likely happen as we come into Friday is that volatility will get crushed as the market removes the gap risk and starts to price in the actual weekend's theta. A short VXX position would be a good position on its own, or as a hedge against any bearish plays you may already have on.