diff --git a/bin/pt-ioprofile b/bin/pt-ioprofile
index 5077e2e6..c1743c24 100755
--- a/bin/pt-ioprofile
+++ b/bin/pt-ioprofile
@@ -359,6 +359,9 @@ _parse_command_line() {
             if [ -f "$PT_TMPDIR/po/$base_opt" ]; then
                opt_is_negated=1
                opt="$base_opt"
+            else
+               opt_is_negated=""
+               opt=$(echo $opt | sed 's/^-*//')
             fi
          else
             if $(echo $opt | grep '^--no-' >/dev/null); then
diff --git a/bin/pt-mysql-summary b/bin/pt-mysql-summary
index 6cfcc0f5..50ce239c 100755
--- a/bin/pt-mysql-summary
+++ b/bin/pt-mysql-summary
@@ -361,6 +361,9 @@ _parse_command_line() {
             if [ -f "$PT_TMPDIR/po/$base_opt" ]; then
                opt_is_negated=1
                opt="$base_opt"
+            else
+               opt_is_negated=""
+               opt=$(echo $opt | sed 's/^-*//')
             fi
          else
             if $(echo $opt | grep '^--no-' >/dev/null); then
diff --git a/bin/pt-stalk b/bin/pt-stalk
index 1ee490ca..52f9686e 100755
--- a/bin/pt-stalk
+++ b/bin/pt-stalk
@@ -361,6 +361,9 @@ _parse_command_line() {
             if [ -f "$PT_TMPDIR/po/$base_opt" ]; then
                opt_is_negated=1
                opt="$base_opt"
+            else
+               opt_is_negated=""
+               opt=$(echo $opt | sed 's/^-*//')
             fi
          else
             if $(echo $opt | grep '^--no-' >/dev/null); then
diff --git a/bin/pt-summary b/bin/pt-summary
index cb7a6395..db2a4663 100755
--- a/bin/pt-summary
+++ b/bin/pt-summary
@@ -368,6 +368,9 @@ _parse_command_line() {
             if [ -f "$PT_TMPDIR/po/$base_opt" ]; then
                opt_is_negated=1
                opt="$base_opt"
+            else
+               opt_is_negated=""
+               opt=$(echo $opt | sed 's/^-*//')
             fi
          else
             if $(echo $opt | grep '^--no-' >/dev/null); then
diff --git a/lib/bash/parse_options.sh b/lib/bash/parse_options.sh
index 76140704..13df9c43 100644
--- a/lib/bash/parse_options.sh
+++ b/lib/bash/parse_options.sh
@@ -427,6 +427,9 @@ _parse_command_line() {
             if [ -f "$PT_TMPDIR/po/$base_opt" ]; then
                opt_is_negated=1
                opt="$base_opt"
+            else
+               opt_is_negated=""
+               opt=$(echo $opt | sed 's/^-*//')
             fi
          else
             # Handle normal cases: --option and --no-option.
diff --git a/t/lib/bash/parse_options.sh b/t/lib/bash/parse_options.sh
index a1d59842..ca6326c8 100644
--- a/t/lib/bash/parse_options.sh
+++ b/t/lib/bash/parse_options.sh
@@ -1,6 +1,6 @@
 #!/usr/bin/env bash
 
-plan 81
+plan 83
 
 TMPFILE="$TEST_PT_TMPDIR/parse-opts-output"
 TOOL="pt-stalk"
@@ -246,6 +246,18 @@ is "$OPT_DISK_BYTES_FREE" "104857600" "Size: 100M"
 parse_options "$T_LIB_DIR/samples/bash/po004.sh"
 is "$OPT_DISK_BYTES_FREE" "104857600" "Size: 100M default"
 
+# ############################################################################
+# Bug 1038995: pt-stalk notify-by-email fails
+# https://bugs.launchpad.net/percona-toolkit/+bug/1038995
+# ############################################################################
+
+# This failed because --notify was misparsed as --no-tify
+parse_options "$T_LIB_DIR/samples/bash/po005.sh"
+is "$OPT_NOTIFY_BY_EMAIL" "" "Bug 1038995: --notify-by-email is empty by default"
+
+parse_options "$T_LIB_DIR/samples/bash/po005.sh" --notify-by-email foo@bar.com
+is "$OPT_NOTIFY_BY_EMAIL" "foo@bar.com" "Bug 1038995: ...but gets set without errors if specified"
+
 # ############################################################################
 # Done
 # ############################################################################
diff --git a/t/lib/samples/bash/po005.sh b/t/lib/samples/bash/po005.sh
new file mode 100644
index 00000000..38b2cc99
--- /dev/null
+++ b/t/lib/samples/bash/po005.sh
@@ -0,0 +1,37 @@
+#!/usr/bin/env bash
+
+:
+
+# ############################################################################
+# Documentation
+# ############################################################################
+:<<'DOCUMENTATION'
+=pod
+
+=head1 NAME
+
+pt-stalk - Wait for a condition to occur then begin collecting data.
+
+=head1 OPTIONS
+
+=over
+
+=item --notify-by-email
+
+type: string
+
+something about mailing.
+
+=item --help
+
+Print help.
+
+=back
+
+=head1 ENVIRONMENT
+
+No env vars used.
+
+=cut
+
+DOCUMENTATION