Member of the U.S. Navy, perjorative. Possibly refers to the resemblence between dress white uniforms and kalimari. In any case, referring to a sailor as a squid can be endearing if you know them but it can be equally (and dangerously) offensive if you are a stranger. Be sure to say it with a smile.
Bar patron - "There's an awful lot of you squids out this weekend."
Sailor - "It's payday, you fuckstick."
Alternately, one sailor to another:
"What's up, squid?"
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