The increasing penetration of variable energy resources in modern electric power systems requires additional flexibility in reserve provision to maintain reliable and efficient grid operations. However, full recognition and appropriate compensation of this flexibility is difficult to ensure within current power market designs due to rigidity in reserve definitions and requirements. This paper proposes a new mixed-integer linear programming formulation for the optimal clearing of a day-ahead market based on swing contracts with dynamically updated regulation reserve zones. Five-bus and 30-bus test cases are used to illustrate the effectiveness of the proposed new market design.