We study whether and why people feel repugnance towards harmless transactions that profit off others’ misfortune, without causing the misfortune itself. Examples of such transactions include second-hand markets for life insurance and prediction markets for disasters. Repugnance in these contexts can be a constraint on market efficiency. In a series of online experiments (N>2000) that vary in the moral intensity of misfortune—from monetary losses in a game to deaths from road accidents—we find robust evidence of repugnance, measured using costly third-party punishment towards the party profiting from others' bad luck. Intentions to profit from others’ misfortune play a limited role in punishment decisions. Repugnance is observed even when profits are associated with good outcomes. Overall, people dislike profit-making when it is attached to others’ (mis)fortune, suggesting repugnance is mainly outcome-based.