This study analyzed the effect of stock option compensation ratio (= stock option compensation / total compensation) on stock price volatility to examine whether managers who receive stock options mitigate their risk-averse tendencies and engage in more aggressive managerial decision-making. Additionally, this study decomposed managerial stock option compensation incentives into price incentives (delta) and risk incentives (vega) and examined the effects of delta and vega on stock price volatility. Among manufacturing firms listed on the Korea Stock Exchange, firms that granted and operated stock options to their managers from 1999 to 2002 and for which research variables could be measured were selected as the analysis sample. The empirical analysis results showed that the managers' stock option compensation ratio had a statistically significant positive effect on stock price volatility. These results were interpreted as indicating that the more stock option compensation managers receive, the more they mitigate their risk-averse tendencies and make aggressive decisions that alter firm risk. When stock option compensation incentives were decomposed, delta, representing price incentives, did not have a statistically significant effect on stock price volatility. Vega, representing risk incentives, did not have a statistically significant effect on stock price volatility as a level variable, but had a statistically significant positive effect on stock price volatility as a change variable. Furthermore, both the level and change variables of average vega divided by the number of executives granted stock options showed a statistically significant positive effect on stock price volatility. These results were interpreted as supporting the finding that the more managers receive stock options that are sensitive to changes in stock price volatility, the more they make aggressive and risk-seeking decisions.