Offshore drilling contractor Transocean reported third-quarter net income of $973 million, or $3.24 per share, more than triple its year-ago results of $309 million, or 96 cents per share. Analysts were expecting the firm to bank just $2.06 per share in profit for the quarter. Revenue for the 3-month period rose 50% to $1.54 billion from $1.02 billion last year.

The current quarter's results were boosted by $276 million from the company's Todco tax sharing agreement, while higher contract drilling revenue gave sales figures a lift.

RIG shares added 2% out of the gate this morning as investors cheered the better-than-expected earnings report. Short sellers might be feeling the squeeze today; as of the latest reporting period, 6.6% of the stock's available float had been sold short. At RIG's average daily volume, it would take an even 3 days for all these shorted shares to be repurchased.

Option traders are already bullishly aligned toward the shares. The Schaeffer's put/call open interest ratio of 0.71 is lower than 74% of other such readings taken during the past 52 weeks. However, with RIG marching steadily higher along its 10-month and 20-month moving averages during the past 4 years, this optimism is to be expected.