'Hull up' is a nautical term that dates from the age of sail (the era, not the game). It is used when reporting other vessels in sight, and simply means that the hull of the target is visible above the horizon. This is a rough indicator of the distance; since in those days the sails of major vessels extended far above the surface, the first sight of another ship would be its sails (assuming you were watching) and at that point, the contact would be hull down. When you had closed the distance enough that the hull was visible, it was hull up.

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