NYSE short interest down 2.8 pct in mid-August

NEW YORK Aug 26 (Reuters) - Short interest on the New York Stock Exchange fell 2.8 percent in mid-August, the exchange said on Tuesday, suggesting a decrease in bearish sentiment in the stock market.

As of Aug. 15, short interest fell to about 17.8 billion shares from 18.3 billion shares as of July 31.

Short interest as of Aug. 15 was equal to 2.77 percent of the total shares outstanding on the NYSE, the exchange said.

Investors who sell securities "short" profit from betting that stocks will fall. Short-sellers borrow shares and then sell them, waiting for the stock to fall so they can buy the shares back at the lower price, return them to the lender and pocket the difference. (Reporting by Phil Wahba; editing by Jeffrey Benkoe)