Jerry Yang might not be Yahoo’s CEO anymore but he did stay at a Holiday Inn Express last night. Shares of Yahoo (YHOO, $12.10, up $1.47) are up nearly 15% today on news that co-founder Yang will step down from his CEO duties once the company finds a replacement. In what has been one of the worst performances Wall Street has ever witnessed, it is hard to believe that dude is stepping down after blowing up the company right in front of shareholders.

Yahoo shares have lost 60% of its value since Yang took over last year. His claim to fame will be the botched deal with Microsoft (MSFT, $19.33, up $0.14), which had offered $33 per share, or $47 billion, to buy the company. The departure of Yang now clears the way for us to get a clearer picture on what Yahoo’s plans will be.

Although Yang will remain on the company’s board, the new CEO will likely give hints as to what direction the company will be taking. Will Yahoo actively seek a merger or will it try and remain independant? No matter what happens, somewhere, Carl Icahn has to be smiling.

The Yahoo November 11 calls (YHQKK, $1.27, up $0.70) are the most active in the November call chain. For December, option traders seem to be targeting the December 13 calls (YHQLM, $1.30, up $0.50). One would expect Yahoo to fade as the day wears on but sentiment could be changing on Wall Street.

Rick Rouse