diff --git a/src/Composer/Util/StreamContextFactory.php b/src/Composer/Util/StreamContextFactory.php
index df61b3c3e..8860e7f17 100644
--- a/src/Composer/Util/StreamContextFactory.php
+++ b/src/Composer/Util/StreamContextFactory.php
@@ -35,11 +35,9 @@ final class StreamContextFactory
         if (isset($_SERVER['HTTP_PROXY']) || isset($_SERVER['http_proxy'])) {
             // Some systems seem to rely on a lowercased version instead...
             $proxy = parse_url(isset($_SERVER['http_proxy']) ? $_SERVER['http_proxy'] : $_SERVER['HTTP_PROXY']);
-        } else {
-            $proxy = false;
         }
 
-        if (false !== $proxy) {
+        if (!empty($proxy)) {
             $proxyURL = (isset($proxy['scheme']) ? $proxy['scheme'] : '') . '://';
             $proxyURL .= isset($proxy['host']) ? $proxy['host'] : '';
 
@@ -70,16 +68,16 @@ final class StreamContextFactory
                 }
                 $auth = base64_encode($auth);
 
-                // Preserve headers if already set in default options 
+                // Preserve headers if already set in default options
                 if (isset($defaultOptions['http']['header'])) {
-                    $defaultOptions['http']['header'] .=  "Proxy-Authorization: Basic {$auth}\r\n";
+                    $defaultOptions['http']['header'] .= "Proxy-Authorization: Basic {$auth}\r\n";
                 } else {
                     $options['http']['header'] = "Proxy-Authorization: Basic {$auth}\r\n";
                 }
             }
         }
 
-        $options = array_merge_recursive($options, $defaultOptions);
+        $options = array_replace_recursive($options, $defaultOptions);
 
         return stream_context_create($options, $defaultParams);
     }
diff --git a/tests/Composer/Test/Util/StreamContextFactoryTest.php b/tests/Composer/Test/Util/StreamContextFactoryTest.php
index dc60fe3bb..691625a94 100644
--- a/tests/Composer/Test/Util/StreamContextFactoryTest.php
+++ b/tests/Composer/Test/Util/StreamContextFactoryTest.php
@@ -71,6 +71,21 @@ class StreamContextFactoryTest extends \PHPUnit_Framework_TestCase
         )), $options);
     }
 
+    public function testOptionsArePreserved()
+    {
+        $_SERVER['http_proxy'] = 'http://username:password@proxyserver.net:3128/';
+
+        $context = StreamContextFactory::getContext(array('http' => array('method' => 'GET', 'header' => "X-Foo: bar\r\n", 'request_fulluri' => false)));
+        $options = stream_context_get_options($context);
+
+        $this->assertEquals(array('http' => array(
+            'proxy' => 'tcp://proxyserver.net:3128',
+            'request_fulluri' => false,
+            'method' => 'GET',
+            'header' => "X-Foo: bar\r\nProxy-Authorization: Basic " . base64_encode('username:password') . "\r\n"
+        )), $options);
+    }
+
     public function testHttpProxyWithoutPort()
     {
         $_SERVER['http_proxy'] = 'http://username:password@proxyserver.net';