Nasdaq short interest down 2.7% in mid-August

Short interest on the Nasdaq fell 2.7% in mid-August, the exchange said on Tuesday.

As of August 14, short interest fell to about 17.67 billion shares, compared with 18.15 billion shares as of July 31.

Investors who sell securities short borrow shares and then sell them, expecting the stock to fall so they can buy the shares back at the lower price, return them to the lender and pocket the difference.

Shorting can also be part of a hedging strategy.