In a pitcher, mix together the sugar and water until the sugar has desolved. Allow to cool.
In a blender, pulse the watermelon and lime juice.
Using a fine mesh strainer, strain the juice into a large pitcher, making sure to press all the liquid out.
Add in the tequila and mix until fully combined.
Place some salt on a shallow plate. Rub the rims of 2 glasses with a lime wedge, then dip onto the salt to coat.
Pour the margaritas into the prepared glasses and top with ice.