Ownership Submission
FORM 4
Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP OF SECURITIES

Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934, Section 17(a) of the Public Utility Holding Company Act of 1935 or Section 30(h) of the Investment Company Act of 1940
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(Print or Type Responses)
1. Name and Address of Reporting Person *
BOMMER SCOTT A
   2. Issuer Name and Ticker or Trading Symbol
TERRA INDUSTRIES INC [TRA] 		5. Relationship of Reporting Person(s) to Issuer
(Check all applicable)
_____ Director __X__ 10% Owner
_____ Officer (give title below) _____ Other (specify below)
(Last)
(First)
(Middle)
712 FIFTH AVE		 3. Date of Earliest Transaction (Month/Day/Year)
09/22/2006
(Street)

NEW YORK, NY 10019		 4. If Amendment, Date Original Filed(Month/Day/Year)
 6. Individual or Joint/Group Filing(Check Applicable Line)
___ Form filed by One Reporting Person
_X_ Form filed by More than One Reporting Person
(City)
(State)
(Zip)
Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned
1.Title of Security
(Instr. 3)		 2. Transaction Date (Month/Day/Year) 2A. Deemed Execution Date, if any (Month/Day/Year) 3. Transaction Code
(Instr. 8)		 4. Securities Acquired (A) or Disposed of (D)
(Instr. 3, 4 and 5)		 5. Amount of Securities Beneficially Owned Following Reported Transaction(s)
(Instr. 3 and 4)		 6. Ownership Form: Direct (D) or Indirect (I)
(Instr. 4)		 7. Nature of Indirect Beneficial Ownership
(Instr. 4)
Code V Amount (A) or (D) Price

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Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned
(e.g., puts, calls, warrants, options, convertible securities)
1. Title of Derivative Security
(Instr. 3)		 2. Conversion or Exercise Price of Derivative Security 3. Transaction Date (Month/Day/Year) 3A. Deemed Execution Date, if any (Month/Day/Year) 4. Transaction Code
(Instr. 8)		 5. Number of Derivative Securities Acquired (A) or Disposed of (D)
(Instr. 3, 4, and 5)		 6. Date Exercisable and Expiration Date
(Month/Day/Year)		 7. Title and Amount of Underlying Securities
(Instr. 3 and 4)		 8. Price of Derivative Security
(Instr. 5)		 9. Number of Derivative Securities Beneficially Owned Following Reported Transaction(s)
(Instr. 4)		 10. Ownership Form of Derivative Security: Direct (D) or Indirect (I)
(Instr. 4)		 11. Nature of Indirect Beneficial Ownership
(Instr. 4)
Code V (A) (D) Date Exercisable Expiration Date Title Amount or Number of Shares
Call Options (Obligation to sell) $ 7.5 09/22/2006   S     5,000 09/22/2006 11/18/2006 Common Stock 500,000 $ 50.04 0 I See Footnotes 1 and 2 (1) (2)
Call Options (Obligation to sell) $ 7.5 09/29/2006   S     5,000 09/29/2006 11/18/2006 Common Stock 500,000 $ 60.07 0 I See Footnotes 1 and 2 (1) (2)
Call Options (Obligation to sell) $ 7.5 10/04/2006   S     10,000 10/04/2006 11/18/2006 Common Stock 1,000,000 $ 91.25 0 I See Footnotes 1 and 2 (1) (2)

Reporting Owners

Reporting Owner Name / Address Relationships
 Director  10% Owner  Officer  Other
BOMMER SCOTT A
712 FIFTH AVE
NEW YORK, NY 10019		     X    
SAB CAPITAL ADVISORS LLC

 		     X    
SAB CAPITAL PARTNERS II LP
712 FIFTH AVE
NEW YORK, NY 10019		     X    
SAB OVERSEAS MASTER FUND, L.P.
712 FIFTH AVENUE, 42ND FLOOR
NEW YORK, NY 10019		     X    
SAB CAPITAL PARTNERS LP
650 MADISON AVENUE 26TH FLOOR
NEW YORK, NY 10022		     X    

Signatures

 /s/ Michael Casey, as attorney-in-fact for Scott A. Bommer   10/11/2006
**Signature of Reporting Person Date

Explanation of Responses:

* If the form is filed by more than one reporting person, see Instruction 4(b)(v).
** Intentional misstatements or omissions of facts constitute Federal Criminal Violations. See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
(1) The call options to which this note relates were sold directly by SAB Capital Partners, L.P., a Delaware limited partnership ("SAB"), as to 2,490 options sold on 9/22/2006, 2,853 options sold on 9/29/2006 and 5,338 options sold on 10/04/2006; SAB Capital Partners II, L.P., a Delaware limited partnership ("SAB II"), as to 49 options sold on 9/22/2006, 50 options sold on 9/29/2006 and 110 options sold on 10/04/2006; and SAB Overseas Master Fund, L.P., a Cayman Islands exempted limited partnership ("SAB Overseas"), as to 2,461 options sold on 9/22/2006, 2,097 options sold on 9/29/2006 and 4,552 options sold on 10/04/2006.
(2) SAB Capital Advisors, L.L.C. (the "General Partner") serves as the general partner of, and has investment discretion over the securities held by, SAB, SAB II and SAB Overseas. Scott A. Bommer is the managing member of the General Partner. Each of the reporting persons hereof disclaims beneficial ownership of the securities to which this Form 4 relates for purposes of Section 16 of the Securities and Exchange Act of 1934, as amended, except to the extent of such reporting person's pecuniary interest in the securities.
 
Remarks:
The power of attorney for Mr. Bommer was filed as Exhibit 24 to the Form 3 filed by the reporting persons with regard to the
 Issuer's securities on August 10, 2006.

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