Alot of Larry Williams stuff makes me scratch my Head - his Market Structure is just Trendline analysis without the Trendlines. That sort of thing. But he does give good Risk Management advice. EDIT I say that as I put down my Larry Williams book and pick up my Al Brooks book @Frederick Foresight just had a Coronary!
You might have better luck looking at volatility skew/smirk. Volume as a whole does not give you much information, you would need to calculate deltas to understand where the market is balanced to.
for futures people try to, the COT reports might be more useful. OI is only kind of useful if you know what the motivation of non market makers are.
Volume indicators are measured over a time frame. OI is the number of contracts that have not been closed yet and are outstanding, but they might have been opened before the start of that measuring time frame. Basically Volume indicators depend on time, and OI indicators don't.
I am referring about OI change at the end of the day. Sometimes OI change is 1000 while volume is only 500. I know OI is updated EOD but over the weekend it's different. Here.
They say that they update the figure daily but that doesn't mean that they only count the activity during the day. They just display the remaining number at the end of the day. But some contracts might have been opened yesterday. The volume on the contrary is normally per day.
I'll tell you a quick story of why I can't get good information from OI. In the 90's, one of the Options in made markets in was Union Carbide. The stock was in the teens and every quarter, a floor broker with a give up of Salomon Brothers would buy about 2500 just OTM calls. This was a very large trade back then. Options in that stock did not trade like that. We all thought the customer was betting on a takeover. After a few quarters of this type of buying, I asked the broker if he knew anything. He said, the customer had a large short position in the stock vs long bonds and wanted to be stopped out on the upside if wrong. The customer was betting on bankruptcy, wanted to own debt and short common. You will never know from large orders that create a larger than typical OI in any option why the customer did that and how good that customer is. I personally, would never look at OI to get long or short. That customer lost money.