In order to understand probability, you have to take things as coming from a random event and people don't clearly have that in their mind from an intuitive standpoint.
They could include, in no particular order of probability or potentially devastating impact on the stability of financial market, default by Greece, exit by Greece from the eurozone or a much more generous rescue deal.
One other quick point: you may want to start with an out of the money call butterfly or put butterfly inorder to lessen the probability of another party exercising an option you sell, as it is detrimental for them to do so while the option is out of the money.
He argues that, inorder to bump up the probability that the restructuring would put an end to Uruguay's debt problems, investors would probably have had to accept a bigger hit.
