NEW YORK (Reuters) -Short interest on the Nasdaq rose 2.02% in mid-August, the exchange said on Tuesday.

As of August 15, short interest rose to about 16.93 billion shares from 16.59 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.