Ruling on using live bait for fishing
Question

Is it haram to use live bait to catch fish with worms or another kind of small animal that tends to help alot when catching fish compared to using fake equipment?
Praise be to Allah.There is nothing wrong with fishing using live worms or some insects or small fish, if there is a need to do so. But if there is no need for that, it is disliked (makruh), because it involves tormenting these creatures.
It says in Kashshaf al-Qina‘ (3/152): It is valid to sell that which may be used as bait, such as an owl that is used as bait by tying it up, and when the target bird comes to it, it is caught. It is disliked (makruh) to do that, because it involves tormenting the bird that is used as bait. It is also valid to sell worms for fishing.”
If it is possible to kill the worms by removing their heads before using them as bait, and they are still good to use for fishing, then that is better.
Muslim (1955) narrated that Shaddad ibn Aws said: There are two things that I memorized from the Messenger of Allah (blessing and peace of Allah be upon him). He said: “Allah has prescribed proficiency in all things, so if you kill, kill well, and if you slaughter, slaughter well. Let one of you sharpen his blade and spare suffering to the animal he slaughters.”
And Allah knows best.