Using Parallels 8, on a RMBP latest ML updates.

I have installed ML in Parallels, and need more space. My RMBP does not have more space to give, but I have an external USB3 2TB drive with plenty of space. I did move the virtual machine onto the external, hoping it would allow me more space, but it still only shows I have 50 gigs free in the VM. I need around 200 gigs to install a time machine backup in parallels. Is there an easy way to expand the hard drive space this VM can use? Or is there something I need to do when installing to begin with to let it use more space from the external hard drive?

Using Parallels 8, on a RMBP latest ML updates.

I have installed ML in Parallels, and need more space. My RMBP does not have more space to give, but I have an external USB3 2TB drive with plenty of space. I did move the virtual machine onto the external, hoping it would allow me more space, but it still only shows I have 50 gigs free in the VM. I need around 200 gigs to install a time machine backup in parallels. Is there an easy way to expand the hard drive space this VM can use? Or is there something I need to do when installing to begin with to let it use more space from the external hard drive?

Parallels should grow the hard drive as you need it, or you can hard resize it in the configuration settings. Haven't seen Parallels 8 yet, in 7 it was the little gear icon under the VM I believe...