In this paper,using the data of Chinese listed companies from 2006 to 2010,we make an empirical study on the relationship between managerial stock options compensation and investment decisions of Chinese listed companies. We find that managerial stock options compensation and investment decisions are endogenous; stock options compensation influences long-term investments positively and significantly; company’s long-term investments also has an positive and significant influence on stock options compensation. Then controlling other factors and endogenous,and introducing the concept of Vega,we find that the stock price volatility will increase the value of executives’ stock options,and reduce their risk aversion,thereby increasing their pursuit of long-term interests of the company,so they will increase the company’s long-term investment.