Ford Motor (F) is up 28 cents to $12.37 and Ford Aug 12 call is the most actively traded equity options contract in the first 30 minutes of trading Friday. The automaker is seeing relative strength after posting a 68-cent per share quarterly profit, which trounced analyst estimates by 28 cents. 28320 Aug 12 call options traded on the news. Most of the action is in smaller lots. The top trade is 584 at the 80-cent Ask price and the average price is 81.1 cents per contract. Meanwhile, implied volatility in Ford options is down 15.5 percent to 37.5, compared to a 52-week high and low of about 69 and 35.

Stocks are indicated modestly higher on positive earnings news Friday. Forty-five minutes before the opening bell on Wall Street, stock index futures indicate that the Dow Jones Industrial Average might add 20 or 30 points at the open.

With no economic data on the calendar, the focus is on earnings. Verizon (VZ) will help the Dow in early trading after the phone company said earnings totaled 58 cents per share in the quarter, which was two cents better than analyst estimates. VZ is up 3.7 percent in pre-market action.

Ford (F) added 5 percent after reporting 68 cents per share for the quarter, and 28 cents better than Street expectations. Honeywell (HON) added 1.6 percent after its profit totaled 60 cents per share, and three cents better than expectations.

However, Dow component McDonald’s (MCD) lost 1.4 percent after reporting in-line results and Amazon.com (AMZN) shares tumbled 10.4 percent after the company said late yesterday that quarterly profits totaled 45 cents, and 9 cents worse than analyst estimates.

Energy-related names might also see early weakness after crude oil lost 60 cents to $78.70 a barrel. Gold gained $2.4 to $1198 an ounce.

Bonds are lower following a second day of strong economic data in Europe. Germany’s Ifo business climate index rose to 106.2 in July, a big jump from the 101.8 in June. The news is weighing on global bond markets and the benchmark ten-year Treasury is off 13/32nd and now yields 2.94 percent.

Meanwhile, the euro is in wait-and-see mode, as players brace for results from the highly anticipated European Bank stress tests. The euro is up .0005 to 1.2889 against the dollar. Meanwhile, the buck edged up .37 to 87.40 against the Japanese Yen.

Microsoft option flow ahead of this afternoon’s earnings is running double the typical level for the stock, as shares trade up 75 cents near $25.77 in relatively light spot volume of 44 million shares. 144,000 calls have traded by mid-afternoon, versus 65,000 puts, with upside Aug 26 and 27s seeing the most volume of nearly 20,000 contracts each. Nearly 25,000 of the recently listed WEEKLY calls that expire tomorrow have traded, led by the 26 strike with 14,000 contracts trading and an average price of 42cents. The 1-day 26 straddle in MSFT is priced near $1, suggesting a reaction in the 50c range either way.

*Scanning all single-stocks subject to 2500 contracts minimum call or put volume

Buy-write in the Select Sector Financials (XLF) early Thursday after an investor sells 30K Dec 15 calls at 76 cents and buys 3 million shares at $14.33. Shares are up 28 cents to $14.43 and implied volatility down about 3 percent to 33 (compared to a 52-week high and low of 53 and 21.5.)

Xerox (XRX) shares gapped higher and are up 67 cents to $9.08 after the company reported a 24-cent per share second quarter profit, which was 3 pennies better than Street estimates. XRX also raised guidance for the full year. Directional sentiment in the options market seems to reflect some bullishness as well. 10,390 Jan 9 calls traded (99 percent Ask). Another 4238 Jan $10 calls traded (60 percent Ask). Implied volatility is down about 7 percent to 34, as shares rally and move to their best levels in nearly one month.

*Scanning all single-stocks subject to 2500 contracts minimum call or put volume