Unrealized gains arise from the appreciation of a security that is considered to be an available for sale of trading security. When a company purchases available for sale securities and trading securities; they do not plan to sell them right away or hold for a long period of time. When available for sale securities appreciate in value; they are recognized as part of Other Comprehensive Income and not the income statement. (Note: All gains and losses that result from trading securities end up on the income statement.) Since these gains are unexpected, hence they are referred to as "unrealized" gains.
Here is the difference between realized gains/losses with unrealized gains/losses:
