I have been experamenting with the same thing.
what I found is that the torpedo seems to hit where the "zero" is when it is in the green.
What I mean is: sitting still waiting for a ship to pass by your cross hairs.
The dimond turns green and you click the "L" locked key to off.
Then move the cross hairs to where you want them on lthe ship and when it shows "zero" fire and it should hit that spot.
At least that is what I Have experienced...
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