If possible run the VM from the SSD (IMO). The performance gain will be quite significant. However you can run from the secondary drive no problem.

Note that if you use the VM sparingly, you can move it to the SSD, run it and then move it back to the drive with lots of space.

Think of the VM program as something like MS Word or Excel and the VM itself like a very large .docx or .xslx file (in reality they are a folder with a number of files but you get the idea).