The primary thing you should look for in a dive watch, as with all other diving gear, is safety. Look for a diving watch with a very loud timer or alarm, and make sure you are confident that you can unfasten the watch quickly and easily if you need to. Other features, such as a large, bright display and a larger than normal wristband, will also prove helpful in a good dive watch.
With bulky dive gear and a large number of straps comes the risk of getting caught on underwater obstacles such as shipwrecks or even trees. A good dive watch should be easy to unfasten in case it gets stuck on debris under the water, but secure enough so that it will not fall off unless you want it to. Before you dive, practice unfastening your dive watch and any other diving accessories that may get caught on underwater objects using one hand. Remember to wear your diving gloves while you are practicing so you are certain you will be able to release yourself from the watch and the rest of your gear with the gloves you would be wearing on a real dive.
Another important safety feature of a dive watch is a loud timer or alarm sound. In general, it is not a good idea to rely solely on your watch timer to signal the end of a dive, but some divers do this anyway. If you plan to use it, make sure the timer is very loud and reliable so you will not miss the end of your dive and stay down for too long.
An ideal diving watch should have a large, bright display. Deep under water, light can be limited even on the sunniest of days. Watches with smaller faces or dimmer backlights will probably be difficult or impossible to read in the middle of a dive. A large enough wristband that will fit around thick, heavily insulated wetsuits or drysuits is also very important if you ever plan on diving in colder water.
The most obvious requirement for a dive watch is that it should be waterproof. Keep in mind, however, that a watch that will remain working when you wear it in the shower may not be able to hold up to the intense pressure that it would be subjected to on a deep water dive. Additionally, make sure your dive watch is intended for ocean diving, because the salt content in ocean water may harm watches not built for ocean dives.