Apple Watch is taking heart rate readings while being held in the air, not pressed against skin. How is this possible? While holding the watch in the air, the heart rate glance provides a heart rate that jumps around.

How is this possible?  The sensor on the back is pressed up against nothing.
The heart rate sensor on the Apple Watch works by processing signal from two photodiodes. It is designed to have two green LED reflect from the wrist, but readings are likely due to picking up light reflected off another surface.

From Apple:


  The heart rate sensor in Apple Watch uses what is known as
  photoplethysmography. This technology, while difficult to pronounce,
  is based on a very simple fact: Blood is red because it reflects red
  light and absorbs green light. Apple Watch uses green LED lights
  paired with light‑sensitive photodiodes to detect the amount of blood
  flowing through your wrist at any given moment. When your heart beats,
  the blood flow in your wrist — and the green light absorption — is
  greater. Between beats, it’s less. By flashing its LED lights hundreds
  of times per second, Apple Watch can calculate the number of times the
  heart beats each minute — your heart rate. In addition, the heart rate
  sensor is designed to compensate for low signal levels by increasing
  both LED brightness and sampling rate.