How to Make a Spy Watch
To make a spy watch with a secret compartment, start by removing the band from the face of a watch by twisting the bands with pliers. Then, tape two bottle caps together with a piece of duct tape to form a container. Next, attach the caps to the back of the watch face, and attach the bands to the caps using more tape. Finally, cover all the visible duct tape with black tape or black nail polish so it's not as noticeable.
Select a cheap analog watch. While you can store very small objects inside a functioning watch, in most cases you'll want to remove the inner mechanism for more room, so start with the cheapest analog watch you can find. Analog watches, with hands and a circular clock face, are recommended since they will still look like a normal watch at a glance. A digital watch will end up with a dark, blank screen, which raises suspicion. More expensive watches may also require specialized tools to remove the back, and no one wants to go through that kind of trouble to make their watch non-functional. Remove the back of the watch. Place a jeweler's screwdriver or eyeglass screwdriver into the lip between the back and side of the watch. Carefully lever the back out, keeping the watch face-down and flat to avoid spilling the pieces inside. If you see any screws around the edge, you will need to unscrew them first, then lever out the back. Set aside the screws in a cup or other container, so you don't lose them. Remove most the internal mechanisms (optional). You could tape a secret message to the inside of the watch back, but anything more substantial will probably interfere with the watch's mechanism. Gut the watch to turn it into a container instead. For an analog watch, make sure to leave the watch face and watch hands in place. Glue the watch face and hands in place. Leave the watch face and watch hands in the watch so it still looks like an ordinary watch at a glance. You may need to glue them in place using a toothpick dabbed in white glue or epoxy glue. If the watch face is transparent, glue a circle of construction paper behind it. Glue the paper on the back side so the glue is not visible from the front. Reattach the back. Your watch is now ready to use as a secret container. To make the compartment accessible without a screwdriver, fit a small piece of tape between the back and the edge before fitting the back in place. To open the compartment, pull on the piece of tape. If the back is screwed on, an easy-access compartment may also require several pieces of tape around the back edge, holding it in place instead of the screws. Remove the bands from a cheap wristwatch. Grab the band near the watch face with a pair of pliers, and twist until it separates from the watch. Repeat for the other side. Some watch bands can be removed by pushing down on the attached bar using a spring bar tool, or by removing small pins with a jeweler's screwdriver or tweezers. Cheap watches usually don't have this option. Choose a watch with a band that has plenty of extra room. Tape together two bottle caps. Find two bottle caps of the same size, roughly as large as your watch face. Tape them together on one side using a single piece of duct tape. This is the container you will hide under your watch. Shallow bottle caps will be less noticeable, but larger ones allow you to store more objects. Black duct tape will be less noticeable. Tape the watch over the bottle caps. Use more duct tape to attach the side of the bottle caps underneath the watch face. Make sure not to tape the bottle caps together – you should still be able to open them. Tape the bands to the bottle caps. You may have to use several pieces of duct tape to make sure the bottle cap stays in place. Disguise the duct tape. Cover the duct tape with ordinary black tape for best results. If you don't have black tape, color the duct tape with black nail polish. Permanent marker might work, but is easily rubbed off. 
Select a cheap analog watch. Remove the back of the watch. Remove most the internal mechanisms (optional). Glue the watch face and hands in place. Reattach the back. Remove the bands from a cheap wristwatch. Tape together two bottle caps. Tape the watch over the bottle caps. Tape the bands to the bottle caps. Disguise the duct tape. 