Basis Risk difference, increase, interest, between

RoastBeef

Hi,

I can't understand well what "Basis Risk" is. In my comprehension, "Basis Risk" occurs when the ratio "Future Price/Spot price" is not constant due to interest rate changes.

In the book it is said that the lower the difference between Future price and Spot price, the lower the basis risk.
I don't catch this. Imagine the Sport price increase with 10% and the future price increase 20% (we are short the future), we are short 10% whatever difference between sport and future was.

Thanks in advance,

Bern