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I've been using streamers and deceivers tied on the Mustad C71S circle hook since last spring.
While it's true that when you do take a fish it is squarely hooked in the jaw, easy to be released, the majority of flyrod fish I take are anyway hooked in the jaw (or close too it). The nature of fly fishing makes it such that it's rare to have a gut hooked fish. If anything you get a throat hook and even then it's usually with small fish.
I've taken fish and lost fish with flies on circles. Can't say they did any better or worse than J hooks. I'll continue to test them out but at this time I see no real advantage to flies on circle hooks and some notable disadvantages.
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