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Yes it is possible to keep them alive. Just make sure that you change the water often. The best way to rig them is with a live bait hook right through the aft end of the squid. They can still swim a little but they have an injured and vunerable look to them, that yells "free meal" at any passing fish. OTOH I have had live squid baits in the water and caught all of the tuna on butterfish, so you just never know.
 

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You really don't have to hide the hook in a live bait. If you try you'll kill the bait, which kind of defeats the purpose. I've kept them alive all night in a five gallon bucket. Just dump another bucket of water on them every five to ten minutes.
 

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Just hook them right through the mantle between their flukes and they swim well. Don't hook them too low otherwise their point will sag and not look good. I also bring a couple of boxes of the small fluke squid baits frozen to use until I catch live squid. They work very well. Just pick out the ones that look healthy.
 
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