NEW YORK, May 27 (Reuters) - Short interest on the

Nasdaq rose 3.3% in mid-May, the exchange said on Monday.

As of May 15, short interest rose to about 16.467 billion

shares, compared with 15.945 billion shares as of April 30.

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.