NEW YORK, Feb 22 (Reuters) - Short interest on the New York Stock Exchange jumped 4.8 percent in mid-February, the exchange said on Friday, touching an all-time high and suggesting an increase in bearish sentiment in the stock market.

As of Feb. 15, short interest rose to about 14.4 billion shares, compared to 13.7 billion shares as of Jan. 31.

The previous record high, on Jan. 15, was 13.85 billion shares.

Investors who sell securities "short" profit from betting 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.

Short interest as of Feb. 15 was equal to 3.8 percent of the total shares outstanding on the NYSE, the exchange said.

The increase in short interest came among worries about more credit losses at financial firms and the stability of bond insurers.

The benchmark Standard & Poor's 500 index .SPX is down almost 2 percent since the end of January.

Those declines have been a boon to short sellers, says Dylan Wetherill, president of short interest tracking Web site ShortSqueeze.com.

"The shorts have huge confidence that the market is going down from these levels," Wetherill said.

"The shorts having been making a lot of easy money as the market has fallen this year, and they are wanting to continue the ride down."

The American Stock Exchange also on Friday reported its highest level of short interest in at least a year of 1.18 billion shares as of February 15. (Editing by Gary Hill, Leslie Gevirtz)

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