Ryan Hietala posted a 6-under-par 66 to finish one shot off the pace. Mike Standly followed at 5-under-par 67.
Watson made a statement early at Le Triomphe Golf & Country Club with an eagle at the par-5 first. He gave a shot back with a bogey at the par-3 third but tallied another eagle at the par-5 fifth to move to 3 under.
The 26-year-old continued his fine play on the par-5s with a birdie at the seventh. He added a birdie at the par-4 ninth and reached 6 under with a birdie at the par-5 12th.
'The par-5s are the key out here so there are plenty of scoring opportunities,' Watson said. 'I took advantage of them today.'
Watson, who had a pair of runner-up finishes last year on the Nationwide Tour, collected a birdie at the par-4 17th for his share of first.
Cox also had a hot start with birdies on each of his first three holes. He then birdied the fifth and added a birdie at the par-5 seventh to rise to minus-5.
Cox kept on rolling with a birdie at the 10th and another at the par-5 14th. The 31-year-old stumbled to a bogey at the 17th but countered with a birdie at the last to join Watson atop the leaderboard.
'I'm extremely happy with my round,' said Cox, who finished second at this event in 1999. 'I got off to a great start which is what I wanted to do and then I kept it going.'
Hietala played the back side first and picked up a pair of birdies over his first three holes. He struggled to a bogey at the 13th but countered with an eagle at the par-5 14th. Hietala then bogeyed the 15th but came back with a birdie at the 18th to make the turn at 3 under.
The 31-year-old then mixed four birdies and a bogey on the front nine to finish one shot back.
Brandt Snedeker, Brett Wetterich and Bill Lunde finished at 4-under-par 68 and in a tie for fifth.
Ricky Barnes, Brenden Pappas, Kyle Thompson, Vance Veazey, Andrew Johnson, Bubba Dickerson, Kevin Durkin, Jeff Brehaut, David Edwards, Will MacKenzie and Jason Schultz are knotted at 3-under-par 69.