NEW YORK, Aug 9 (Reuters) - Short interest on the Nasdaq

declined 2% in late July, the exchange said on Friday.

As of July 31, short interest fell to about 14.068 billion

shares, compared with 14.356 billion shares as of July 15.

Investors who sell securities "short" borrow shares and then

sell them, on bets the stock will fall so they can buy the

shares back at a lower price, return them to the lender and

pocket the difference.

Shorting can also be part of a hedging strategy.