Hi,
While MIS positions are squared off using auto square off, normal positions are not. In above scenario position with larger M2M will be squared off. Though we expect that trader should decide this because even if these positions are carried by any chance, we report short margin to exchange and exchange charges the penalty as laid down that will be charged to the trader. Since these positions are in normal there is adequate safety with RMS unless the overall M2M hits 80%. We have alerts starting from 50% onwards and such positions are monitored continuously. Ideally trader should not let the trade go this way.
happy trading ,
Team VPS