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A combined heat and power plant (CHP) has the ability to provide ancillary services and therefore, can contribute to the improvement of flexibility and reliability of the power system. To motivate CHPs to provide flexibility services, this work investigated the potential benefit for CHPs from participating simultaneously in day-ahead and frequency regulation markets. A new CHP model was proposed, which considers both heat recovery from flue gas condensation and thermal energy storage. Based on the multi-market optimization using real market prices, it can be concluded that providing the frequency regulation service in addition to day-ahead trading can increase the annual profit of CHPs, which was 2.75% for the studied CHP. Meanwhile, the benefit was clearly affected by the heat demand as both high and low heat demand seasons (e.g. in winter and summer) can limit the flexibility provided by the CHP. In addition, the sensitivity analysis was carried out to assess the impacts of key factors, including electricity price, heat demand, cost of electricity, and bid size for frequency reserve services, on the benefit from the participation in both markets. The price difference between the day-ahead and frequency regulation markets and the cost of electricity generation were found to have clear impacts on the benefit of the CHP.