Whisk the egg, water, and flour together in a medium mixing bowl. In small handfuls, dip the squid in the batter, and shake off the excess. Gently lower the squid into the hot oil and cook for 1 minute. The squid will not be browned, but lightly golden in color. Using a spider strainer, remove the squid and transfer to a wire rack set over a paper towel-lined half-sheet pan. Season with salt and pepper, as desired. Repeat until all of the squid is cooked. Make sure to check the temperature of the oil before each batch to ensure it is 375˚ F. Serve immediately.